The Federal Reserve said today that the U.S. economy was expanding â€œmodestlyâ€ last month, supported by improvements in housing and auto sales, even as the labor market showed little change.
â€œConsumer spending was generally reported to be flat to up slightly since the last report,â€ the Fed said in its Beige Book business survey, which is based on accounts from the 12 district Fed banks. Conditions in manufacturing were â€œsomewhat improved,â€ according to the report, which provides anecdotal evidence on the health of the economy two weeks before the Federal Open Market Committee meets in Washington on Oct. 23-24.
Total U.S. auto sales also outpaced analyst estimates last month, with vehicles selling at an annualized rate of 14.9 million in September, above an estimated 14.5 million.
Fed to Continue Easing in December, Swonk Says
Diane Swonk, chief economist at Mesirow Financial Holdings Inc., talks about the Federal Reserveâ€™s Beige Book business survey released today and the outlook for Fed monetary policy and the U.S. economy. She speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.”
The Beige Book provides support for Fed Chairman Ben S. Bernankeâ€™s view that economic growth isnâ€™t strong enough to bring about a quick healing of the labor market. A Labor Department report last week showed that while the unemployment rate unexpectedly declined in September, payroll growth slowed.
The Fed on Sept. 13 announced a third round of quantitative easing, with purchases of $40 billion a month of mortgage debt, and said its benchmark interest rate was likely to stay low through the middle of 2015.
The reportâ€™s description of the economy is not as positive as Beige Books earlier in the year, which used the word â€œmoderateâ€ to describe the pace of expansion, said Dana Saporta, U.S. economist at Credit Suisse Group AG in New York. â€œIn Fed parlance, modest is a step down from moderate,â€ she said.
Via – Bloomberg