The U.S. economy continued its slow recovery in recent weeks, the Federal Reserve Board said on Wednesday, with pockets of strength in manufacturing offset by "depressed" housing markets and employers still reluctant to hire in significant numbers.
The U.S. central bank's Beige Book showed more anecdotal evidence that the economy remains unable to break into a faster expansion needed to generate sufficient job growth. The report appeared unlikely to derail the Fed's latest efforts to push down borrowing costs by boosting its purchases of Treasury debt.
"Reports from the twelve Federal Reserve Districts indicate that the economy continued to improve, on balance, during the reporting period from early/mid-October to mid-November," the Fed said in the report, which was released ahead of its next policy meeting on Dec. 15.
The Fed said economic activity in the Boston, Cleveland, Atlanta, Dallas and San Francisco districts increased at a "slight to modest" pace, while the New York, Richmond, Chicago, Minneapolis and Kansas City districts reported a "somewhat stronger" pace of activity.
Philadelphia and St. Louis reported business conditions as "mixed", the Fed said.
The Beige Book showed that manufacturing activity continued to expand in almost all districts, with "relatively strong growth seen in the metal fabrication and the automotive industries."
But it said housing markets remained depressed, with several districts reporting a further weakening in the sector over the past six weeks.
Reports on consumer spending were seen as positive, with several districts expecting holiday sales to exceed year-ago levels. But the Fed noted that households were sensitive to prices and were still focused on buying necessities.
"Hiring activity showed some improvement across most districts, although employers are waiting for clearer signals of expanding business prospects before adding significantly to payrolls," the Fed said. Atlanta and Chicago reported a preference for hiring temporary workers, while staffing firms in Dallas described hiring activity as "strong".
Wage pressures remained "subdued" across districts, indicating little inflation pressure.
The Fed said prices for final goods and services were fairly stable across districts despite rising input costs, especially for agricultural commodities, metals and fuel.
Reuters