Federal Reserve: Economy growing, prices rising

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- Businesses are passing on surging costs to consumers. Hiring is modest. Wages are barely rising. The housing market is still struggling.

But the economy is expanding at a"modest to moderate pace", the Federal Reserve said.

That's the picture from the Fed's Beige Book report released Wednesday.

Retailers and manufacturers across all 12 of the Federal Reserve's districts said they're seeing higher input costs. That's no surprise given surging prices on everything from oil to food lately.

But while they told the Fed they're already passing on some of those costs to customers, homebuilders -- especially in the Cleveland and Atlanta districts -- are not, most likely due to the troubled housing market.

Both commercial and residential construction continues to be one of the slower segments of the economy, while manufacturers, retailers and financial firms reported slight growth.

Meanwhile, it's still tough to get credit, and in some regions, banks are actually tightening their standards.

The Fed reported little evidence of wages increasing in most of its districts.

The report echoes recent comments from Fed Chairman Ben Bernanke, who acknowledges rising prices are impacting the average American, but not yet at a level that will derail the recovery.

The Beige Book summarizes economic conditions in the central bank's 12 districts across the nation, and is released eight times a year. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,232.02 -53.72 -0.29%
Nasdaq 5,089.36 -1.43 -0.03%
S&P 500 2,126.06 -4.76 -0.22%
Treasuries 2.22 0.03 1.37%
Data as of 10:31am ET
Company Price Change % Change
Bank of America Corp... 16.75 0.02 0.12%
Apple Inc 132.54 1.15 0.88%
Hewlett-Packard Co 34.76 0.93 2.75%
AT&T Inc 34.71 -0.36 -1.03%
Microsoft Corp 46.90 0.00 0.00%
Data as of May 22
Sponsors

Sections

The record airbag recall and the GM ignition switch recalls has resulted in a huge percentage of cars on the road today having been recalled. More

The True Cost, a new documentary, chronicles the evils of the clothing industry and asks us to stop buying so much cheap stuff More

Sarah Kauss launched S'well to rid the world of plastic water bottles. In five years, she's sold 4 million of her stainless steel bottles. More