July 17 - U.S. economic activity expanded at a slight to modest pace from late May through early July with firms expecting slower growth ahead as they also reported signs the jobs market continues to soften, in line with the Federal Reserve's recent pivot to more keenly assessing slowing demand for labor to ensure it doesn't wait too long before cutting interest rates.
While seven Fed districts reported some level of increase in activity, five noted flat or declining activity - three more than in the prior reporting period, the survey noted, as firms forecast a dimming outlook. The Fed's analysis, released roughly every six weeks, comes as Fed Chair Jerome Powell and his colleagues have emphasized that risks on inflation and jobs are now in balance. Earlier on Wednesday two top Fed officials said interest rate cuts are"getting closer," remarks that appear to set the stage for a lowering of borrowing costs in September.
One contractor told the Philadelphia Fed they had received 20 applications for electrical jobs—"the most I have seen in the last 20 years." The unemployment rate hit a 2-1/2-year high of 4.1% in May and annual wages increased at the slowest pace in three years amid an expanding labor pool, the latest government data showed.