U.S. economic activity slightly increases amid persisting price pressures: Fed Beige Book

WASHINGTON, March 6 (Xinhua) -- The U.S. economic activity has increased slightly since early January, while the price pressures persisted, the U.S. Federal Reserve said in its Beige Book released on Wednesday.

During the reporting period, eight districts reported slight to modest growth in activity, and three others reported no change, and one district noted a slight softening, said the latest Beige Book, a survey on economic conditions based on information collected from its 12 regional reserve banks.

Price pressures remained during the same period, the survey showed, adding several districts reported some degree of moderation in inflation.

Contacts of the survey highlighted increases in freight costs and several insurance categories. Nevertheless, businesses found it harder to pass through higher costs to their customers, who became increasingly sensitive to price changes, the report said.

The Beige Book also showed that consumer spending, particularly on retail goods, inched down in recent weeks, noting that households continued to trade down and to shift spending away from discretionary goods.

At a congressional hearing on Wednesday, U.S. Federal Reserve Chair Jerome Powell reiterated that the central bank is not ready to start cutting interest rates.

"If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured," Powell said.

The Chicago Mercantile Exchange Group's FedWatch Tool, which acts as a barometer for the market's expectation of the Fed funds target rate, showed that the probability of the Fed maintaining rates in March meeting was 95 percent.