The US economy is growing at a “modest to moderate” pace, with the jobs market continuing to strengthen, wages rising and consumer spending up moderately, a Federal Reserve report showed Wednesday.
Ten of the 12 Fed districts surveyed reported economic growth between late February and early April, the Fed’s Beige Book said. Activity in two districts, Atlanta and Dallas, was flat.
“Most Districts said that economic growth was in the modest to moderate range and that contacts expected growth would remain in that range going forward,” the report said.
The latest Beige Book, a collection of anecdotal information on conditions in the economy, came two weeks before Fed policymakers make their interest-rate decision. The Federal Open Market Committee (FOMC) is not expected to announce a hike to the benchmark ultra-low 0.25-0.50 percent rate after lifting it from near zero in December.
Overall, the report gave policymakers a modestly upbeat assessment of the labor market and inflation, the Fed’s two main issues in setting monetary policy.
It said labor market conditions “continued to strengthen” — job gains were seen in all but the Cleveland district, where there was a decline in employment.
Tepid wage growth, a key concern of Fed Chair Janet Yellen as a sign of continued slack in the jobs market that could forestall further credit tightening, suggested some momentum, with respondents reporting wages increasing in 11 of the 12 districts.
Consumer spending, which drives two thirds of the economy, increased “modestly” in most areas, the report said.
Weak inflation, which the Fed expects to eventually rise toward its 2.0 percent target, reflected gains, the report said. “Overall, prices increased modestly across the majority of districts,” it said, but noting input cost pressures were still easing.
Low prices, however, weighed on the output of the energy and mining sector and on farmers, it said.
The Beige Book showed a number of bright spots in the US economy as it was exiting a lackluster first quarter. There was a general expansion of business spending, and increases in manufacturing, construction and real estate activity.
The FOMC holds its next policy meeting on April 26 and 27. AFP