Economic activity in the U.S. has continued expanding in recent weeks, the
said Wednesday, but five of the central bank's districts reported a deceleration in the pace of growth, while seven saw little change in the rate.
The Fed's latest beige book, an economic summary that's released eight times a year, said some slowing was seen in the Boston, New York, Philadelphia, Kansas City and Dallas districts, though Dallas still characterized growth as strong.
For most other districts, the advancement was generally described as modest. Atlanta said activity was mixed, Richmond called its own progress slow, and the San Francisco district reported a "solid" expansion.
Consumer spending increased slowly in most districts, the Fed said, a reality reflected in sluggish sales of vehicles and housing-related goods. Although a number of districts noted some bloated levels of automobile inventories, most other retailers said they were satisfied with their inventory levels. Tourism was for the most part was steady, but relatively strong.
The beige book also said real estate and construction were uniformly weak for the residential sector, but "fairly widespread strength was recounted in the commercial sector." Additionally, financial institutions reported softer loan demand, especially for home mortgages. Credit quality remained favorable.
Virtually every district saw declining home sales, and most reported "substantial increases" in the inventory of unsold homes. "In general, residential real estate contacts expected that housing markets would remain weak, if not weaken further, in the months ahead," the Fed said. "Such concerns were specified in the reports from Philadelphia, Cleveland, Atlanta and Kansas City."
Labor markets were primarily steady since the last report was released in late July, with scattered shortages and upward wage pressure observed in several districts, especially for workers with specialized skills.
"Widespread increases in the prices of energy and certain other commodities persisted since the last report, though most of these increases do not appear to have passed through to finished consumer goods," the Fed said.
Manufacturing activity generally expanded in all 12 districts. The pace of manufacturing slowed in New York, Richmond and Kansas City, and it rose in the Philadelphia and Chicago districts. Further, drought and near-drought conditions persisted throughout much of the country.
Reports of sustained increases in the cost of metals, energy and petroleum products, and other raw materials remained widespread, although rising energy costs appeared to moderate in the San Francisco district.
The beige book was prepared at the Federal Reserve Bank of New York and is based on information collected on or before Aug. 28. The document summarizes comments from Fed contacts like businesses, economists and market experts, and it isn't intended to serve as a commentary on the views of policymakers.
However, the report does provide guidance for some of the issues the Fed will be discussing later this month when it meets to decide on what to do about rates. Last month, the Fed kept its fed funds target at 5.25%, the first time in more than two years it had met without lifting rates.
Economic data released since the August meeting have been mixed, with some reports suggesting the economy isn't overheating and others indicating inflationary pressures are persisting in certain areas.