June 6 (Bloomberg) -- The Federal Reserve said today that the U.S. economy maintained a moderate pace of growth as factory output rose and the real-estate market improved.
“Overall economic activity expanded at a moderate pace” from early April to late May, the Fed said in its Beige Book business survey, which is based on reports from its 12 district banks. “Hiring was steady or increased slightly.”
The report gives central bankers anecdotal evidence on the state of the world’s largest economy two weeks before they meet in Washington. Atlanta Fed President Dennis Lockhart said today that an extension of the central bank’s Operation Twist program to reduce borrowing costs is “on the table” following data that showed job growth in May was the weakest in a year.
Today’s Beige Book used language similar to the previous report in April, which said the economy “continued to expand at a modest to moderate pace” in all 12 Fed districts. That report also said that “hiring was steady or showed a modest increase across many districts.”
The leadership of the Fed will probably provide more clarity on their views before the June 19-20 meeting. Fed Vice Chairman Janet Yellen will speak tonight in Boston about the economic outlook, and Chairman Ben S. Bernanke will testify about the economy before Congress tomorrow.
U.S. stocks rose, sending benchmark indexes toward their biggest gains this year on speculation global policy makers will act to revive a slowing economy. The Standard & Poor’s 500 Index advanced 1.8 percent 1,308.32 at 2:04 p.m. in New York. The yield on the 10-year Treasury note climbed for a third day, reaching 1.65 percent.
“All options are on the table for the Fed,” Ellen Zentner, a senior economist at Nomura Holdings Inc. in New York, said before the report. “Clearly the downside risks have intensified, and the Fed will surely acknowledge that in the June statement.”
A Bloomberg News survey of economists shows the economy is likely to weather slumping stocks, a slowdown in hiring and the European debt crisis.
Gross domestic product will increase by 2.2 percent in 2012 and by 2.4 percent in 2013, the median of 70 economists surveyed from June 1 to June 5 shows. The estimates are down 0.1 percentage point from those issued last month.
Today’s Beige Book reflects information collected on or before May 25 and summarized by the Dallas Fed.
Manufacturing “continued to expand in most districts” and vehicle sales “remained strong,” the Beige Book said. Most districts reported gains in production or new orders, except for Philadelphia, Richmond and St. Louis.