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U.S. economic conditions continue to improve across nation: Fed report.

WASHINGTON, Dec. 2 Kyodo

The U.S. economy continued to improve ''modestly'' from late October to mid-November as consumer spending gained, the Federal Reserve said Wednesday in a periodic business sentiment survey.

''Reports from the 12 Federal Reserve districts indicate that economic conditions have generally improved modestly since the last report,'' the central bank said in the Beige Book report.

In the report compiled by the Federal Reserve Bank of New York based on information collected before Nov. 20, the Fed said eight districts indicated some pickup in activity or improvement in conditions, while the remainder reported that conditions were little changed or mixed.

The new Beige Book report will serve as a basis for discussion at the Dec. 15-16 gathering of the Fed's policy-setting Federal Open Market Committee.

At its last FOMC talks on Nov. 3-4, the Fed held its target for overnight interest rates to zero to 0.25 percent and reiterated its pledge to keep it there for an ''extended period'' in a bid to ensure a nascent economic recovery gains traction.

The U.S. economy grew at an annualized real 2.8 percent in the third quarter of 2009, the first expansion after four quarters of contraction and the fastest rate in two years.

The Beige Book report said consumer spending, the main driver of economic activity, ''picked up moderately since the last report, for both general merchandise and vehicles.''

Many districts noted relatively robust sales of used autos and most districts indicated that non-auto retailers were holding lean inventories in the run-up to the holiday season, it said.

The report said residential real estate conditions were ''somewhat improved'' from very low levels, on balance, propelled by the lower end of the market.

Commercial real estate, in contrast, was reported to have weakened in virtually all districts, with rising vacancy rates, downward pressure on rents, and little, if any, new development.

Manufacturing activity was portrayed as ''steady to moderately improving'' across most of the country, while conditions in the nonfinancial service sector generally strengthened somewhat.

As for the labor market, the Fed detected scattered signs of improvement but said ''further layoffs, sluggish hiring and high levels of unemployment'' are still hanging over most of its districts.
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Publication:Japan Weekly Monitor
Date:Dec 7, 2009
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