Fed survey: Modest economic expansion continues
By Neil Irwin
The economy continued expanding, though at a modest rate, in recent weeks, according to a new Federal Reserve survey. It shows that though the pace of growth downshifted over the summer, the growth rate appears to have leveled off.
The Fed's "beige book," a compilation of anecdotal reports from businesses around the country released Wednesday afternoon, says that "national economic activity continued to rise, albeit at a modest pace" from September through early October. That's a contrast to the previous beige book, in early September, which reported "widespread signs of deceleration compared with previous periods."
The latest report has particular relevance as the Fed prepares for a Nov. 2-3 policy meeting at which it appears likely to approve unconventional new efforts to stimulate growth. The beige book is prepared to help the policymakers make their decisions at those meetings, and the absence of any sign that the economic growth is picking up after its summer lull gives the central bankers a greenlight to consider new steps to try to encourage growth.
The details of the report are a hodgepodge of results from different industries and parts of the country, ranging from moderately positive to moderately negative. It is evidence of a nation that is neither sinking back into economic contraction nor bursting into a robust expansion.
"Manufacturing activity continued to expand" across most of the country, with particular signs of strength in the export sector, semiconductors and high-tech equipment, and automobile production, the report said. But, it said, "hiring at manufacturing firms remained sluggish."
In the service industry, "accounting activity improved slightly, spurred by merger and acquisitions work," the Boston and Dallas Federal Reserve banks "noted increases in consulting activity," and "there were some reports from architectural firms that activity had picked up." Demand for transportation services appeared to have slowed, however.
Retail spending was "flat to moderately positive" in most of the country, with declining sales in the southeast United States.
The housing market remained weak, as did bank lending, according to the beige book.
| October 20, 2010; 2:02 PM ET
Categories: Federal Reserve, U.S. Economy
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