US economy remains solid – Deutsche Bank

Analysts at Deutsche Bank note that last night’s Fed’s Beige Book revealed that the US economy remains solid but with increased concerns on trade tensions, which didn’t sound particularly ground-breaking.

Key Quotes

“In the details, 10 of the 12 districts reported “moderate to modest” growth with the exception in the Dallas District which reported “strong growth”, in part as it’s linked to the energy sector.”

“On trade, “manufacturers in all districts expressed concerns about tariffs and in many districts reported higher prices and supply disruptions” and a number of districts reported higher input costs due to the import tariffs raising prices. Notably, there was only a “slight to moderate” pass through of higher lumber and metal prices to end consumers for now. Elsewhere the report continued to note tight labour markets and a shortage of skilled workers, but wage increases remained “modest to moderate”, although it was noted that a couple of Districts had seen a pickup in the pace of wage growth.”