2018.04.1822:23:00UTC+00U.S. Economic Growth Undeterred by Tariff Concerns: Fed’s Beige Book

A report from the Federal Reserve showed that “robust” business borrowing, increasing customer spending and tight job markets indicate the U.S. economy continues to be on track for sustained growth, with the threats of a global trade war the one main outlier.

In the Fed's latest “Beige Book” report, which is the summary of anecdotes from contacts with businesses in its 12 regional districts, the Fed said the overall outlook among businesses continued to be “positive”, but that there were many concerned regarding the Trump administration's imposition of tariffs.

The central bank said in its report that covered the period from March to early April that contacts in several sectors including manufacturing, agriculture, and transportation voiced concern about the newly imposed and/or proposed tariffs.

The word “tariffs” was mentioned 36 times in the report, compared to it not appearing at all in the prior Beige Book released in March 7. It was referenced as a factor affecting prices or a possible concern for the outlook in 10 of the 12 regional banks' activity summaries.

But despite these concerns, the economy seems to be cruising along, with some proof that the tax cuts adopted in December may have started impacting business spending and investments.

Several Fed districts posted a surge in commercial and industrial lending, from a “robust” 17 percent annual increase in St. Louis to “solid” growth in Atlanta and a “healthy” demand in Cleveland. The Dallas Fed reported noticeably stronger growth in loan volumes in commercial and industrial sector, and commercial real estate.