Price hikes widespread across US

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Price tags of 1 U.S. dollar and 1.25 dollars are seen at a Dollar Tree store in New York, the United States, Nov. 26, 2021. [Photo/Xinhua]

The U.S. economy grew at a "modest to moderate" pace during October and early November while price hikes were widespread across the country amid supply-chain disruptions and labor shortages, the Federal Reserve said on Wednesday.

"There were wide-ranging input cost increases stemming from strong demand for raw materials, logistical challenges, and labor market tightness," the Fed said in its latest survey on economic conditions, known as the Beige Book, based on information collected from its 12 regional reserve banks.

"Prices rose at a moderate to robust pace, with price hikes widespread across sectors of the economy," the survey said, noting strong demand generally allowed firms to raise prices with little pushback.

While the outlook for overall activity remained positive in most Fed districts, some business contacts noted "uncertainty" about when supply chain and labor supply challenges would ease, according to the survey.

The survey also showed that childcare, retirements, and COVID safety concerns were widely cited as sources that limited labor supply. Meanwhile, many Fed districts noted concerns that the federal vaccination mandate could exacerbate existing hiring difficulties.

"Nearly all Districts reported robust wage growth. Hiring struggles and elevated turnover rates led businesses to raise wages and offer other incentives, such as bonuses and more flexible working arrangements," the survey said.

At a hearing before the House Financial Services Committee on Wednesday, Fed Chair Jerome Powell said that the risk of persistent higher inflation "has clearly risen" and the Fed's policy "has adapted to that."

"I viewed it's appropriate that we consider at the next meeting tapering faster so that it wraps up a few months earlier," he said.

The Fed began in November to reduce its monthly asset purchase program of 120 billion U.S. dollars by 15 billion dollars. At this pace, the Fed would end its asset purchases by June next year. Some Fed officials and economists have urged the central bank to end asset purchases by March to give more leeway to raise rates sooner.

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