U.S. economy continues modest expansion in March: Fed survey

U.S. economy continued modest and moderate expansion in March, and the tight labor market is putting pressure on wage growth, the latest survey released by the Federal Reserve showed on Wednesday.

"Economic activity increased in each of the twelve Federal Reserve Districts between mid-February and the end of March, with the pace of expansion equally split between modest and moderate," said the Fed in its latest Beige Book which gauges its 12 districts' economy.

The survey showed that manufacturing activity continued to expand at a modest to moderate pace, while consumer spending varied in different categories.

Labor market remained tight, as companies are feeling more difficult to hire both low-skilled and higher skilled workers, said the survey.

With the tight labor market, modest wage increases broadened. Business generally expected labor demand to increase moderately in the next six months, and looked for modest wage growth, said the survey.

Prices rose modestly and businesses expected the moderate price growth will continue in the next several months, according to the survey.

The Fed raised benchmark interest rate in March, and officials expected two more hikes this year.

Policymakers also signaled that they considered to reduce the central bank's 4.5 trillion U.S. dollar balance sheet, on the expectation that the economy continues moderate growth. Enditem