To Avoid Raising Wages, Firms Are Now Hiring Felons And Drug Addicts

Last month, we summarized the April Beige Book by saying that a month after the March inflationary panic, the one thing, perhaps the only thing, that was fascinating companies was the threat of trade wars. In fact, we said that the "quick and dirty summary" for the April Beige Book, when economic activity continued to expand "at a modest to moderate pace across the 12 Federal Reserve Districts", would, in a word literally, be "tariffs" and here's why:

March Beige Book instances of word "tariff": 0
April Beige Book instances of word "tariff": 36

Fast forward to today when fears of trade wars appear to have moderated (no pun intended) and there were only 22 instances of the "word" tariff in the just released, May Beige Book.

Meanwhile, as trade war fears receded modestly, the various regional Feds found that, once again, the U.S. economy expanded "moderately" through much of April and May, which was a modest upgrade from previous periods, although with little indication of overheating... as was the case in late 2007 and early 2008; one exception to this mediocrity was the Dallas District, where overall economic activity sped up to a solid pace.

The Fed's Beige Book report, arguably the least market moving of all if sometimes the most interesting as it is based on direct, anecdotal information collected by the 12 regional Fed banks, said manufacturing showed “strong” gains, while employment and prices continued to rise “modestly” or “moderately”

"Manufacturing shifted into higher gear with more than half of the Districts reporting a pickup in industrial activity and a third of the Districts classifying activity as "strong." Fabricated metals, heavy industrial machinery, and electronics equipment were noted as areas of strength" the report, which was released at 2pm on Wednesday, disclosed.

More