P.M. Briefing : Inflation Not Accelerating, Economy Still Growing, Federal Reserve Says

In an assessment of current economic conditions, the Federal Reserve said today that overall inflationary pressures do not appear to be accelerating and the economy is still growing.

The economic review in the so-called Tan Book issued about every six weeks is one of the tools used by Fed governors in adjusting monetary policy. The Federal Open Market Committee, which makes decisions regulating the money supply, is scheduled to meet next July 5-6.

The Fed report said, “With some exceptions, wage and price pressures are not accelerating.” It noted that in some areas, businesses have been unable to pass on increased costs to consumers.

Retail sales were “generally positive,” but auto sales fell, manufacturing growth leveled off and real estate markets were sluggish, the Fed said. Some areas reported “undesirably” high inventories, particularly in autos, the report said.

The Fed said that firming oil prices helped energy-producing regions and that recent rains eased drought problems in a number of areas. Environmentally related legal disputes restricted lumber supplies, it said.