Beige Book Shows Growth Moderate

Consumer spending increased in a number of Fed districts.
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U.S. economic activity continued to grow moderately, generally speaking, between mid-October and November, the

Federal Reserve

said Wednesday in its regional survey known as the beige book.

The report, published for the eighth and final time this year, summarizes business activity in the Fed's 12 districts. While most reports characterized growth as moderate, two districts reported that economic growth actually accelerated. A couple said the pace of activity decelerated or was mixed.

Consumer spending increased in a number of districts, although several reports continued to say that home-related and automobile sales were sluggish. In addition, the report said that districts were cautiously optimistic in their holiday retail sales outlook.

Solid increases in consumer spending were reported by Kansas City and Richmond. On the other hand, sales were weaker in Boston and missed expectations in Dallas.

Manufacturing conditions held up well for the most part, again with weakness in housing and auto-related producers. Five of the 12 districts indicated softness in auto and auto-related production, including Atlanta, Chicago, Cleveland, Kansas City and St. Louis.

Nearly every district reported that housing markets continued to show a decline in single-family home sales, along with some reports of lower home prices and rising inventories. At the same time, housing demand continued to be strong in a few specific markets. Both New York and Dallas noted improved demand for rental housing, while Atlanta said condominium vacancy rates were rising.

Several districts said labor markets were tight since the last report. The Boston, Kansas City and Richmond reports said there was strong demand for skilled workers. The Dallas report said that labor shortages were constraining the capacity for some firms. Wage pressures were in check in some districts, but Boston, New York and San Francisco reported faster wage growth for some specialized professions.

The majority of Fed districts characterized price pressures as contained. Some districts said that declining energy prices led to a drop in fuel surcharges. Philadelphia said that price increases weren't as widespread as reported earlier. Richmond, however, said that prices for inputs and finished goods rose since the last report.

The latest beige book was prepared at the Federal Reserve Bank of Richmond and was based on information collected before Nov. 20. The beige book summarizes comments from Fed contacts like businesses, economists and market experts, and it isn't meant to serve as a commentary on the views of policymakers.