MercoPress. South Atlantic News Agency

Federal Reserve ‘Beige Book’ confirms US economy modest expansion

The US Federal Reserve said on Wednesday that all but one of its 12 banking districts experienced modest expansion from late November through the end of the year. The survey known as the Beige Book showed that the final weeks of 2011 were among the strongest.

In the Beige Book report of anecdotal information on business activity collected from contacts around the country, the US central bank said the outlook was one of steady if slow improvement.
 

“Reports on consumer spending were favourable in general,” the report said. “Consumer spending and confidence generally was characterized as firmer than in recent reporting periods.”
 

The evidence also suggests inflation is not a major concern, with many districts reporting that upward pressures on prices from high commodity prices had eased significantly.
 

“The combination of limited permanent hiring in most sectors and numerous active job seekers has continued to keep a lid on general wage increases,” the Beige Book reported.
 

The one district that didn't experience growth was Richmond, Virginia, although even there, the Fed said economic activity either “flattened or improved slightly.”
 

The report comes just six months after the economy nearly stalled under the weight of high food and gas prices and supply disruptions from Japan that slowed US manufacturing.
 

The economy and the job market have both improved since then. And December may end up being the strongest month of 2011. Employers added 200,000 jobs. And the unemployment rate fell to 8.5%.
 

Consumers are spending more on cars and travel, the survey noted. Auto sales in the Atlanta area were the best sales in more than two years. Boston, New York, Richmond and Atlanta experienced gains in tourism from a year ago. In Boston alone, businesses expect double-digit growth in hotel revenue in 2012.
 

U.S. manufacturing continued to lift the economy, particularly in industries that make heavy equipment and steel. That has helped boost energy, farming and auto manufacturing sectors, the report said.