The U.S. economy maintained a steady growth pace between late August and early October, as a tight labor market with nascent wage pressures contributed to a “mostly positive” outlook, a report from the 12 Federal Reserve districts showed.

“Most districts indicated a modest or moderate pace of expansion,” according to the Fed’s latest Beige Book, an economic survey by reserve banks. “Outlooks were mostly positive, with growth expected to continue at a slight to moderate pace in several districts.”

The job market “remained tight” with modest employment and wage growth, according to the report. In the San Francisco district, some small business owners said they needed to bring back health-care benefits to attract applicants.

“Wage growth held fairly steady at modest levels, although some districts reported rising pressure for certain sectors,” the report stated. Three districts – Dallas, Richmond and San Francisco – noted a shortage of construction workers, which in some cases constrained building activity.

A tight labor market has yet to lift inflation to the Fed’s 2 percent target. The report characterized price growth generally as “mild.”

Overall, prices increased “slightly on net,” the report said.

Housing expanded in most districts, and “contacts in a few districts expressed optimism about future growth,” the Beige Book said. Even so, home inventories were reported to be low enough to restrain sales in some districts.

The oil and gas sector showed signs of stabilizing, and Dallas Fed energy business contacts expect 2017 to be a better year.

Commercial real estate contacts in a few districts expressed concern about economic uncertainty surrounding the Nov. 8 U.S. presidential election.


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