US firms point to steady economy but see lower profit margins, Fed says

U.S. economic activity was little changed from September through early October and firms saw a slight uptick in hiring, continuing recent trends that have reinforced expectations the Federal Reserve will opt for a smaller 25-basis-point reduction in borrowing costs in two weeks.

The U.S. central bank’s latest temperature check on the health of the economy also showed that inflation pressures continued to moderate while input prices generally rose faster than selling prices, denting firms’ profit margins.

The economy, and inflation in particular, remains a key issue among voters ahead of the Nov. 5 U.S. presidential election.

“On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth,” the Fed said on Wednesday in the survey known as the “Beige Book,” which polled the business contacts of each of its 12 regional banks through Oct. 11. “Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.”

 

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