Fed Beige Book Shows U.S. Inflation Rose to 3.8% in April, Energy Costs Transmit Across Sectors

According to the Federal Reserve Beige Book released on June 4, U.S. inflation climbed to 3.8% in April from 3.5% in March, pressuring consumers and businesses. Among 12 Federal Reserve districts, 10 reported economic activity growing at a slight-to-moderate pace, one declined slightly, and one remained unchanged. The report showed that rising energy costs related to Middle East conflicts have become the primary source of current inflationary pressure, with impacts transmuting to transportation, packaging, food, and fertilizer sectors.

Consumer spending weakness and persistent uncertainty are dampening business sentiment, with companies expecting no significant improvement in near-term economic growth. Meanwhile, the labor market has stabilized following recent Federal Reserve rate adjustments, though AI adoption appears to have slowed hiring for entry-level positions.