Fed describes labor market as strong, weak inflation as 'transitory'

WASHINGTON - U.S. economic growth continued “at a solid pace” in the first half of the year though it likely weakened in recent months as higher tariffs depressed global trade and business investment weakened, the Federal Reserve said on Friday in its semi-annual report to Congress.

“Economic activity increased at a solid pace in the early part of 2019,” with sturdy household consumption offsetting weak business investment and growing risks from a tariff-related slowdown in trade, the Fed said in one of its most pointed accountings yet of how the Trump administration’s use of tariffs has affected the economy.

U.S. businesses added 224,000 new jobs last month, the Labor Department reported earlier on Friday, an outcome that led bond investors to increase their bets the Fed would only reduce rates by a quarter of a percentage point at its policy meeting this month.

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