Higher energy prices continue to have a ripple effect on the regional economy

SAINT LOUIS, MO (KMOX) - Higher energy prices continue to increase costs.

That's just one of the findings of the latest snapshot of our regional economy. St. Louis Federal Reserve economist and Assistant Vice President Charles Gascon explains, there's a cascading effect, "that's leading to increases in shipping costs. That gets passed over to food and a lot of other good we purchase. and then that ultimately can feed into the service side of the economy as well."

Gascon tells KMOX the St. Louis Fed saw a ten-percent increase in the number of businesses reporting that they're increasing prices for their customers.

With prices rising how are the companies that make the good we purchase holding up? "If you look at manufacturing related to homebuilding activity and all the supplies that go into it, that's been weak," says Gascon, "auto manufacturing's been weak." At the same time defense production is picking up in our 7 state region.

The latest Beige Book report from the Fed also notes that home construction is off to a slow start, likely due to higher than anticipated mortgage rates.

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