U.S. companies continued to add employees through April and May as the world’s largest economy kept expanding at a “moderate pace,” a key Federal Reserve survey said Wednesday afternoon.
“Overall economic activity expanded at a moderate pace”, the Fed said in its Beige Book, which is based on reports from its 12 district banks. “Hiring was steady or increased slightly.”
The news is welcome relief following a government jobs report released last week that said employers added the fewest jobs in a year in May and that the unemployment rate rose to 8.2 per cent, from 8.1 per cent in April.
Among the other positive points: manufacturing, home sales, residential and commercial construction all improved across most districts. And loan demand from small and mid-sized businesses increased.
On the negative side, consumer spending was flat or at best only marginally higher in most districts.
The Beige Book, released eight times a year, is used in the monetary policy meetings of the Fed’s Federal Open Market Committee. The next meeting, scheduled for June 20, is expected to address the issue of whether further monetary stimulus is needed.
“While the Beige Book is only a qualitative indicator, it’s not particularly gloomy, and suggests that the drop we’ve seen in factory orders, and a couple of months of poor hiring, aren’t being seen more broadly as a full stall in growth,” Avery Shenfeld, chief economist at CIBC World Markets, said in a brief research note.