NEW YORK — The Federal Reserve said oil prices climbed in every U.S. district last month and supply chain costs rose as the Middle East war widened. A surge in diesel prices is adding to mounting inflationary pressure in the United States.
In its October Beige Book released on the 14th, the Fed said the effects of higher oil prices appeared in reports from all districts. Businesses reported that higher costs from elevated diesel prices and fuel surcharges were being passed through supply chains, according to the report. The average retail price of diesel in the U.S. topped $6.50 a gallon last month, a record high. In response, U.S. President Donald Trump moved to address the situation, agreeing with Russian President Vladimir Putin on the 9th of this month to ease sanctions on Russian diesel.
Prices rose strongly in three of the 12 Federal Reserve districts, the Fed said. Prices increased moderately in eight districts and edged up in one. In three of the eight districts with moderate price growth, cost pressures on businesses intensified or strengthened. Business contacts in several districts said inflationary pressure from other commodity prices, tariffs and insurance premiums was also persisting, the Beige Book said.
With consumers reacting sensitively to price increases, businesses were unable to fully pass higher costs on to selling prices. Labor market conditions were little changed overall, though some signs emerged of weaker hiring demand tied to the adoption of artificial intelligence. In five districts, some businesses cut staff or delayed hiring as AI investment lifted productivity. Those firms also expected job creation to slow going forward.
The Beige Book is a report on economic conditions compiled by the 12 regional Federal Reserve banks, which gather information from banks, businesses and experts in their districts. It is typically published two weeks before a regular meeting of the Federal Open Market Committee (FOMC), which sets interest rates.