Inflation in U.S. began to increase at moderate pace as the job market continued tightening, a report released by the Federal Reserve showed on Wednesday.
"Prices increased in all Districts, and most reports noted moderate inflation," said the Fed in its latest survey on economic conditions in January and February, known as the Beige Book.
The survey found that wage growth picked up to a moderate pace in view of the tightening of the labor market.
"Across the country, contacts observed persistent labor market tightness and brisk demand for qualified workers," said the report.
It also found that employers raised wages and expanded benefit packages in response to tight labor market conditions.
The report gave an upbeat assessment of the U.S. economy, saying that the economy continued to expand at a modest to moderate pace across the 12 Federal Reserve districts in January and February.
Fed officials widely expected that the economy would grow at a faster pace this year, driven by fiscal stimulus and improved overseas demands.
"Many of the forces that acted as headwinds to U.S. growth and weighed on policy in previous years are generating tailwinds currently," said Fed governor Lael Brainard on Tuesday.
Fed officials now continue to consider gradual interest rate hikes appropriate for the economy. In last December, they expected three rate hikes this year.
Market investors hold that the possibility for the central bank to raise interest rates four times this year became strong in view of the upbeat economic outlook.
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