Fed survey finds US economy growing moderately
WASHINGTON (AP) — Economic growth held steady across the United States from July through late August, as Americans bought more cars and homes and auto factories added workers.
A Federal Reserve survey released Wednesday showed that all 12 of the Fed’s regional banking districts reported modest to moderate growth. That’s roughly in line with the Fed’s previous survey of those districts from late May through early July.
Attractive financing options helped boost demand for new cars and trucks in most districts, with many reporting robust sales.
The survey, known as the beige book, said that job growth was steady and that hiring in manufacturing improved modestly, especially at auto and auto-parts factories. But the Kansas City and San Francisco districts said federal spending cuts had caused production cutbacks at some defense plants.
The beige book is based on anecdotal reports from businesses gathered by the Fed’s regional banks. The information was gathered for the Fed’s next meeting on Sept. 17-18.
The overall economy grew at an annual rate of 2.5 percent in the April-June quarter. Many analysts believe that growth in the July-September quarter will be around 2 percent to 2.5 percent.
Some economists believe the economy is strong enough for the Fed to begin slowing its bond purchases at the September meeting. Others say the Fed may hold off at that meeting because they want to see more data. The $85 billion a month in purchases of Treasury and mortgage bonds have kept long-term interest rates low, encouraging more borrowing and spending.
The most critical report left before the Fed meets is the August employment report, which is due out Friday. Economists forecast that the economy created 177,000 jobs in August. That’s slightly higher than the 162,000 created in July, but below the average of 192,000 jobs a month added this year. The unemployment rate is expected to stay at 7.4 percent.
Still, other signs have been mixed. Manufacturing expanded in August at the fastest pace since June 2011, according to the Institute for Supply Management, an encouraging sign.
But U.S. businesses cut back on their orders for long-lasting manufactured goods in July. And U.S. consumers barely increased spending more slowly, heled back by weak income growth.