Service inflation persists, hard to stay below 3% -strategist

STORY: The Federal Reserve is trying to engineer a so-called "soft landing" for the U.S. economy in which economic growth gradually slows and the unemployment rate remains low.

The latest government data showed the unemployment rate hit a 2 1/2-year high of 4.1% in May and annual wages increased at the slowest pace in three years amid an expanding labor pool.

The central banks survey described wage gains as growing at a modest to moderate pace in most districts, although several reported a slowing of wage growth.

"The labor market remains fairly tight. Wage growth is slowing, but not falling. So the consumer looks well-positioned. But that's one area we keep watching because that has a direct driver on on economic growth and therefore corporate earnings," said Haworth.