Most regional reserve banks reported employment was “holding steady or growing only slightly,” the Fed said today in its Beige Book business survey based on reports from its 12 districts. The report reflects information collected on or before Aug. 20 and summarized by the Boston Fed.
“Retail activity, including auto sales, had increased since the last Beige Book report” in most districts, the Fed said. “Many districts reported some softening in manufacturing, either a slowdown in the rate of growth or a decline in the level of sales.”
Today’s Beige Book gives policy makers anecdotal evidence on the economy before they meet in Washington Sept. 12-13. Policy makers said at their July 31-Aug. 1 gathering that further action would probably be needed “fairly soon” without evidence of “substantial and sustainable” improvement in the recovery, minutes released last week showed.
The Federal Open Market Committee will weigh whether more accommodation is needed to spur an expansion that isn’t fast enough to bring down a jobless rate stuck above 8 percent since February 2009.
“The economy continues along this modest growth track that it’s been in for a long time,” said Josh Feinman, the New York- based global chief economist for DB Advisors, the Deutsche Bank AG asset management unit that oversees $219 billion, and a former Fed senior economist. “It’s a seesaw pattern of ups and downs around a pretty mediocre trend.”
The Standard & Poor’s 500 Index advanced 0.2 percent to 1,411.66 at 3:10 p.m. in New York as seven of 10 main industry groups rose. The yield on the benchmark 10-year Treasury note increased 0.02 percentage point to 1.66 percent.
Six districts indicated the local economy “continued to expand at a modest pace” and another three, including Chicago, cited “moderate” growth, today’s report showed. Philadelphia and Richmond reported “slow growth in most sectors and declines in manufacturing,” while Boston cited “mixed reports” and some slowdown since the previous report.
The economy will probably expand 1.8 percent in the third quarter and 2.1 percent in the fourth, according to the median of 75 estimates in a Bloomberg News survey. Gross domestic product grew 2 percent in the first quarter of this year before slowing to 1.7 percent in the following three months.