Fed: U.S. Economy Continues to Grow at Moderate Pace

×
Yellen
Susan Walsh/APFederal Reserve Chair Janet Yellen
By MARTIN CRUTSINGER

WASHINGTON -- The U.S. economy strengthened in all regions of the country in July and August, in areas from consumer spending to auto sales to tourism, the Federal Reserve reported in a survey released Wednesday.

All 12 of the Fed's regions reported growth. Six -- New York, Cleveland, Chicago, Minneapolis, Dallas and San Francisco -- characterized growth as "moderate." The other regions reported somewhat slower expansion. Four described growth as "modest," and two noted signs of improvement.

The survey found no clear evidence that the economy is expanding so fast that the Fed might soon need to begin raising interest rates to prevent inflation.

Most regions reported optimism about key economic sectors. A majority cited increased loan demand, for example, and hotel occupancies.

The survey, known as the Beige Book, is based on anecdotal reports from businesses and will be considered with other data when Fed policymakers next meet Sept. 16-17.

After that meeting, economists think the Fed will reduce its monthly bond purchases for a seventh time but will leave its key short-term rate unchanged. That rate has been near zero since December 2008. The Fed has kept rates ultra-low to try to reduce high unemployment and energize a sluggish recovery.

Now, with job growth strong and unemployment falling, investors have been speculating about when the Fed will start raising rates. Most analysts think the first increase will occur around mid-2015.

At its September meeting, the Fed is expected to reiterate that rates will remain low "for a considerable time" after the bond purchases end. Those purchases are set to end in October.

In a speech last month at a Fed conference in Jackson Hole, Wyoming, Yellen offered no clarity on the timing of the first rate hike. She continued to note that by some measures, the job market remains less than healthy: Pay growth is weak, for example, many people have been unemployed for more than six months and others who are working part time would prefer full-time jobs.

The Fed survey said trends in employment, wages and inflation had remained "relatively unchanged" in the past two months. It did note that wage pressures are greater in sectors where there are shortages of skilled labor.

The report cited shortages of truck drivers in New York, construction workers in Atlanta and skilled information technology workers in Boston. It said business contacts in Dallas reported that the job market remained "very tight" in the energy sector.

Consumer spending was reported to be growing at rates ranging from slight to moderate in most districts, with some areas noting record-high levels of auto sales.

Tourism was reported to have increased throughout much of the country. But manufacturing, the report said, could be divided into three groups -- expanding, contracting or unchanged.

Sales of previously owned homes and construction of new homes was either expanding or holding steady in about half the country.


Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

Add a Comment

*0 / 3000 Character Maximum

2 Comments

Filter by:
nthereoff

Economy improving? Still see family and friend out of work. Many of those jobs are paying less then they did 5 years ago.. Seeing is believing

September 03 2014 at 6:58 PM Report abuse rate up rate down Reply
Dragisa Mladenovic

USA economy is on steroids seem as KLA-Tencor
KLA-Tencor is at all time high. Why? It is a best Short Sale candidate, se below why!
KLAC reported 4th quarter 2014 earnings of $0.8 per share on July 24, 2014. This missed the $0.86 consensus expectations of the 18 analysts following the company
Zack Investment Research downgrade KLAC –KLA TENCOR Corporation to UNDERPERFORM
Columbine Capital Services downgrade KLAC –KLA TENCOR Corporation to UNDERPERFORM
Ford Equity Research downgrade KLAC –KLA TENCOR Corporation to SELL
INSIDE TRANSACTION -Negative
Bell Bobby R. - Executive Vice President Sell on 08/08 /2014 5,740 price $71.72
Kirk Michael D. Executive Vice President Sell on 08/07/2014 1596 price $72.30
Martin Brian M. General Counsel Sell 6975 price on 08/07/2014 $72.30
Kirloskar Virendra A. Chief Accounting Officer Sell on 08/07/2014 6632 price $72.30
Kirloskar Virendra A. Chief Accounting Officer Sell on 08/06/2014 3088 price $70.91
Martin Brian M. General Counsel Sell 6178 price on 08/06/2014 $70.91
OPTIONS: Option Implied Volatility Low for S&P Stocks Trading Near New highs
BY Midnight Trader
— 8:01 AM ET 08/27/2014
08:01 AM EDT, 08/27/2014 (MT Newswires) -- Option implied volatility is low for S&P stocks trading near new highs:

September 03 2014 at 3:59 PM Report abuse -1 rate up rate down Reply
darbrow717

Banking conditions improving, thanks to us middle class workers. You're welcome.

September 03 2014 at 2:37 PM Report abuse +1 rate up rate down Reply