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BUSINESS Thursday 17 OcTOber 2019
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Fed survey finds U.S. economy being hurt by trade battles

WASHINGTON (AP) — The Fed hopes to avoid the
U.S. economy expanded need for deeper rate cuts
at a modest pace in Sep- in the future," he said.
tember and into October, The report, compiled from
despite rising trade tensions information gathered by
and weaker global growth the Fed's 12 regional banks,
that hampered manufac- said that the banks' busi-
turing, and adverse weath- ness contacts still expected
er hitting farmers. the economic expansion
In its latest assessment of to continue but many had
business conditions around lowered their outlooks for
the country, the Federal growth over the next six to
Reserve reported Wednes- 12 months.
day that "persistent trade The report also found con-
tensions and slower global ditions varied by regions.
growth" were weighing on States in the southern and
the economy. western part of the coun-
The survey, known as the try generally were more
beige book, will be used upbeat than regions rep-
by Fed officials when they resenting the Midwest and
meet Oct. 29-30 to decide Great Plains.
whether to cut interest rates That disparity likely was
for a third time this year. influenced by the tough
Financial markets are ex- times faced by many
pecting another rate cut farmers. They have been In this July 31, 2019, file photo workers clean the outside facade of State Farm Stadium in Glen-
dale, Ariz. On Wednesday, Oct. 16, the Federal Reserve releases its latest ‘Beige Book’ survey of
as the central bank seeks caught between President economic conditions.
to protect the economic Donald Trump's higher tar- Associated Press
expansion from the fall- iffs on billions of dollars in
out from a trade war be- Chinese imports and re- businesses across all re- Even with the tight labor retailers and manufacturers
tween the world's two big- taliatory tariffs imposed gions were having to deal markets, wages were de- noted rising input costs, of-
gest economies, the United by China, which has also with persistent worker scribed as rising only mod- ten for items that had been
States and China. canceled purchases of U.S. shortages and tight labor erately but some upward hit with new tariffs in the
The beige book findings will farms goods, including soy- market conditions across pressure was noted for trade war. The report said
likely be cited by Fed offi- beans, in an effort to hurt a various skill levels and oc- lower-skilled workers in the that retailers were finding
cials who believe the cen- key Trump constituency. cupations. This has been retail and hospitality indus- more success in passing on
tral bank should cut rates "Agricultural conditions de- an issue as unemployment tries and for higher-skilled the price increases to their
again because of rising risks teriorated further due to has continued to fall and professional and technical customers than U.S. manu-
that the nation's longest re- the ongoing impacts of ad- in September dipped to a workers. facturers were finding.
covery, now in its 11th year, verse weather, weak com- half-century low of 3.5%. A number of smaller com- Trump announced last Fri-
could be derailed. modity prices and trade A number of districts report- panies reported difficulty day a temporary truce in
Gus Faucher, chief econo- disruptions," the Fed report ed that manufacturers had matching pay offers from the U.S.-China trade battle,
mist at PNC Financial Ser- said. reduced employment be- larger firms and many em- saying he had agreed to
vices Group, said based on The report found that the cause of softness in new or- ployers were continuing to suspend a tariff hike sched-
the beige book's emphasis initial impact from the Gen- ders. However, some firms use non-wage incentives uled to go into effect this
on areas of weakness he eral Motors auto strike had were concerned about the such as increased bonuses week on $250 billion of Chi-
expected the Fed will cut been limited, with auto longer-term availability of and benefits to attract and nese imports. He said that
rates again at the October sales described as "robust" workers and opted to trim retain workers. the Chinese had agreed to
meeting. during the survey period. hours rather than lay off Price increases were de- buy $40 billion to $50 billion
"By cutting rates now, the The beige book said that employees. scribed as modest but both in U.S. farm products.q