Beige Book Shows Recovery on Track
NEW YORK (
) -- Economic activity continued to improve in all of the
Federal Reserve's
12 districts although employers were still hesitant to hire, according to the latest Beige Book data released Wednesday. The anecdotal compilation of economic conditions will be used as a reference at the
Federal Open Market Committee's
December meeting.
The report said both manufacturing activity and tourism expanded across nearly all of the Fed districts while professional and non-financial services also saw improvement.
Retail spending appeared to be on an upward track with most districts anticipating strong holiday sales; although several districts noted that value and necessity factored largely into purchases. Three districts said demand for big ticket items remained weak.
As usual, housing prices and construction activity were depressed.
As far as employment was concerned, most Districts saw increased hiring but the report noted: "Employers are waiting for clearer signals of expanding business prospects before adding significantly to payrolls."
According to the Beige Book, prices of goods and services held steady despite higher input costs as companies were hesitant to increase prices while consumers are cutting back on spending. Manufacturers in the Boston, Cleveland and Atlanta districts are planning price hikes in the near future.
The report reflects information collected on or before Nov. 19 but recent U.S. economic data suggests that the recovery remains solidly intact. Last week the Department of Commerce said the U.S. economy expanded 2.5% in the third quarter, upwardly revising its earlier estimate for growth of 2% and showing strong sequential improvement from the second quarter's growth of 1.7%.
Even the labor market has shown mild improvement as the number of people filing for jobless benefits for the first time dropped to 407,000 last week, from 441,000 and the private sector added 93,000 jobs in November, according to Automatic Data Processing's employment report that was released early this morning.
The consumer picture has also improved as the University of Michigan said consumer sentiment jumped to 71.6 in November and sales from the first weekend of the holiday shopping season showed marked improvement from the prior year.
The report will be referenced by the Federal Open Market Committee at its next policy-setting meeting on Dec. 14.
-- Written by Melinda Peer in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.