The US economy continued to grow in recent weeks, but only at a moderate pace at best, though there were continued signs of improvement, the US Federal Reserve said in a report on Wednesday.
The Beige Book on regional economic performance, prepared for the Fed’s policy meeting later this month, said that anecdotal reports nationwide “suggest that national economic activity expanded at a modest to moderate pace.”
Compiled from information collected by the Fed’s 12 regional banks and covering the period from late November through the end of last month, the report highlighted signs of steady improvement in the world’s largest economy.
“Compared with prior summaries, the reports on balance suggest ongoing improvement in economic conditions in recent months, with most districts highlighting more favorable conditions than identified in reports from the late spring through early fall,” it said.
Consumer spending — a key driver of the economy — picked up in most districts and reflected “significant gains” in holiday retail sales compared with last year’s season, the Fed said.
Travel and tourism expanded broadly and demand continued to strengthen for non-financial services, including professional and transportation services.
Manufacturing, the sector that led the recovery from the end of the recession in June 2009, continued to expand, but at a slower pace in areas such as technology products.
Activity in the depressed housing market remained “sluggish,” but there were a few signs of improvement in “somewhat soft overall” commercial real-estate markets.
The Fed, whose dual mandate is price stability and maximum employment, said its latest summary of economic conditions showed “very limited” upward price pressures and price increases.
Inflation remained subdued amid the tepid economic growth that has left producers reluctant to pass through rising wholesale costs.
With the unemployment rate still a high 8.5 percent last month, wage pressures stayed “modest.”
“The combination of limited permanent hiring in most sectors and numerous active job seekers has continued to keep a lid on general wage increases,” the Beige Book said.
The report came in advance of the Fed’s first policy meeting of the year on Jan. 24 and 25.
At the Dec. 13 meeting of the Federal Open Market Committee, the policymakers decided to begin revealing their own interest rate projections in economic forecasts, a major move to improve communications with the public.