Washington, DC, September 8--The economy was in relatively good shape before Katrina slammed into the Gulf Coast, the Fed's Beige Book survey of current economic conditions showed Wednesday.
Growth was widespread across the country in July and August, with only the New England region reporting mixed results.
Inflation seemed to be stirring in the summer months, the survey found.
There were significant price increases in certain commodities and energy products, especially gasoline. Some industries were able to pass some of these costs to consumers, the survey said.
At the same time, the survey found that overall consumer price increases, excluding energy, remained "modest".
The concern about higher prices post-Katrina was echoed in a speech earlier today by Michael Moskow, the president of the Federal Reserve Bank of Chicago.
Moskow said that the hurricane may result in higher prices in the short-term, even though the long-run national impact of the storm remains to be seen.
The Beige Book report is essentially a collection of anecdotes from business contacts collected by the 12 regional Fed banks and is designed to help Fed policymakers at their upcoming meeting on Sept. 20 to set monetary policy for the next six weeks.
The report was prepared by the Federal Reserve Bank of Minneapolis.
According to the survey, a few Fed districts reported softening in residential real estate markets, but from already high levels of activity. Demand was beginning to soften in the hot Florida market, the report said.
Factory activity firmed in most districts except Boston and St. Louis, the survey said.
The Fed report also said the labor market was strengthening pre-Katrina, although wage increases remained modest.
