Fed Beige Book Survey: U.S. Economy Picked Up at End of Year

Fed survey: U.S. economy picked up at end of yearBy MARTIN CRUTSINGER

WASHINGTON (AP) - Holiday shopping, strong auto sales and a recovering housing market helped boost the U.S. economy from the middle of November through early January, according to a Federal Reserve survey released Wednesday.

The Fed said 12 of its regional banking districts reported "modest or moderate" growth in the final weeks of 2012. Of those, only St. Louis said growth had slowed from the previous survey, which covered October through early November.

Consumers increased spending at the end of the year in every district. Auto sales were steady or stronger in 10 districts. Home sales increased in nine districts. And home building expanded in all but one.

Still, employers in some parts of the country delayed hiring because of uncertainty over the fiscal cliff. Congress and the White House reached a deal on Jan. 1 to prevent sharp income tax increases from hitting most Americans. But they put off decisions on government spending cuts.

The report, called the Beige Book, provides anecdotal information on economic conditions through Jan. 4. The information collected by the regional banks will be used as the basis for the Fed's policy discussion at the Jan. 29-30 meeting.

Many economists believe the Fed will take no new steps at that meeting.

The Fed last month said it planned to keep its key short-term interest rate at a record low even after unemployment falls close to a normal level - which it said might take three more years. And it said it would keep buying $85 billion a month in Treasurys and mortgage bonds to try to keep borrowing costs low and encourage more spending.

The economy has shown some signs of improvement in recent months. But unemployment remains high at 7.8 percent.

Job growth has been modest but steady. In December, employers added 155,000 jobs, roughly matching the monthly average in 2011 and 2012.

Wage growth has been weak. But at the same time, consumers are seeing little inflation.

Retail spending grew in December from November, led by higher sales of cars, furniture and clothing. Still, many consumers are likely to pull back on spending at the start of the year because lawmakers and President Barack Obama allowed a two-year reduction in Social Security payroll taxes to lapse.

Most Americans will start seeing less money in their paychecks this month. A person earning $50,000 a year will see take-home pay shrink by roughly $1,000 in 2013. That's likely to slow consumer spending and weigh on overall economic growth.

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17 Comments

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Big John

If the Speaker of the House is in charge of policy and the economy would you please tell me why Bohner has not fixed everything in the last two years and why the Republicans want the White House so badly?

January 18 2013 at 2:07 PM Report abuse -1 rate up rate down Reply
1 reply to Big John's comment
democrackso

Well little John. Ask Harry Reid why he blocks everything that comes out of the House. Well well well little John so you admit that it was Pelosi's fault that the economy collapsed in 2008 and that Pelosi and Harry Reid handed Obama the collpased economy in 2009. Glad you finally realize that too.

January 18 2013 at 7:44 PM Report abuse +1 rate up rate down Reply
TINKDAY

Maybe the economy seemed to pick up at the end of the year, because of the holidays and everyone is paying substantialy more for everything and the Fed keeps buying more worhtless securities, putting more money, that it does not have into the economy.

January 17 2013 at 1:04 PM Report abuse +1 rate up rate down Reply
janeswizzle

Where do I buy some of these rose colored glasses these journalists are wearing?

January 17 2013 at 12:37 PM Report abuse +2 rate up rate down Reply
1 reply to janeswizzle's comment
janeswizzle

Oh thank you so much. I'm a registered Republican can I still qualify ?

January 17 2013 at 12:49 PM Report abuse +3 rate up rate down Reply
janeswizzle

I don't believe this hogwash for one minute. The real truth is watching people struggle to find a job other than "Hey would like just the sandwich or the combo meal." 7.8 % unemployment according to "the labor stats" more than likely it's about 21%. Not everyone can afford rose colored glasses.

January 17 2013 at 12:20 PM Report abuse +2 rate up rate down Reply
Larry

Hey I used to make $45. 00 an hour now I make $15.00. I am so glad that I have a good post recession job. I spend 2/3 less than before. Sorry that I can't help to expand the economy. Gee.. I also make nothing on my savings, can't invest and I lost my retirement with my last job.. Life under Obamais great...

January 17 2013 at 11:57 AM Report abuse +1 rate up rate down Reply
motown571

I must have missed that.

January 17 2013 at 11:51 AM Report abuse rate up rate down Reply
wjs27skeet

Yea sure, and you can trust the Fed when they put out a statement on the Economy

January 17 2013 at 11:31 AM Report abuse +3 rate up rate down Reply
Iselin007

If the US can compete with the Trade Deals in place then how come we have a trade gap? Maybe the jerks that support the trade deals are taking bribes or have investments in foreign companies or governments?

January 17 2013 at 11:18 AM Report abuse +1 rate up rate down Reply
Iselin007

If you count all the undocumented aliens working and you stuff the employed count with L1,H1B,H2B, and all the other foreign visa workers of course you can get only 7.8% National unemployment! maybe if they get rid of theose people and hire US citizens the economy would improve for all the unemployed US citizens!

January 17 2013 at 10:41 AM Report abuse +3 rate up rate down Reply
Iselin007

Gee those part time jobs requiring Public Assistance really add up!

January 17 2013 at 10:36 AM Report abuse +2 rate up rate down Reply