WASHINGTON – The Federal Reserve says the U.S. economy grew at a modest pace this fall, lifted by higher consumer spending and more home sales and construction.
The Fed said Wednesday in its latest snapshot of the economy that nine of its 12 regional banks reported growth was modest or moderate from early October through mid-November. The New York Fed said growth levelled off, while it slowed in Boston and was mixed in Kansas City.
The Fed’s report suggests that healthy consumer spending is offsetting overseas headwinds that have weighed on U.S. manufacturers.
The report, known as the Beige Book, is released eight times a year and consists of anecdotal reports from businesses in each of the 12 districts.
It will be used for discussion when the central bank next meets Dec. 15-16. Fed officials at that meeting are widely expected to raise interest rates for the first time in nine years.
In a speech Wednesday, Federal Reserve Chair Janet Yellen signalled that a rate increase is likely, provided that the economy continues to grow at its current pace and hiring stays healthy.
The November jobs report will be released Friday, and economists forecast that it will show that employers added 200,000 jobs, while the unemployment rate remained 5 per cent.
All 12 of the Fed’s districts reported that hiring picked up in the past two months. Many, however, said that the job gains were driven by temporary and entry-level positions that were filled by staffing firms.
In most districts, wages rose only for skilled positions that companies were having difficulty filling. The Atlanta Fed, however, said there were signs that employers are paying more for entry-level, lower-skilled jobs.
Home sales rose in seven of 12 districts, the Beige Book said, while housing construction increased in most Fed districts as well.