The Beige Book summary of economic conditions across the 12 Fed districts was for the period between early July and late August. The tone shifted to a less hectic pace of growth overall which the report noted was in large part due to the "rise of the Delta variant" of Covid-19 that has affected travel and leisure, to supply shortages that have restrained output in manufacturing, and lack of housing stock during a period of high demand.
Three districts slightly downgraded their assessment of conditions (New York, Minneapolis, San Francisco) but the remainder kept to the same sort of expansion in the previous report.
The watchword for the report is "moderate" with all districts reporting expansion. Growth is uneven across sectors, but those that are expanding need workers. The report said all districts noted "extensive labor shortages that were constraining employment and, in many cases, impeding business activity". Shortages are resulting in "an acceleration in wages, and most [districts] characterized wage growth as strong".
Inflation was said to be "steady at an elevated pace" with half of districts characterizing upward pressures as "strong" and the other half as "moderate". Upward pressure on input prices was "widespread" and many businesses "reported having trouble sourcing key inputs". Some businesses "are finding it easier to pass along more cost increases through higher prices" and several districts "indicated that businesses anticipate significant hikes in their selling prices in the months ahead."
There's a lot here for Fed policymakers to mull over when they meet on September 21-22. On net, it may be that the vibrant labor market and concerns of continued higher inflation will tip the scales toward starting to taper asset purchases, although any hint of a rate hike will remain far distant.