The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said.
“Economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate,” the central bank said today in its Beige Book business survey, which is based on reports from the Fed’s district banks.
The report, prepared for discussion at the Federal Open Market Committee’s Jan. 29-30 meeting, may strengthen the resolve of policy makers who want to press on with the Fed’s $85 billion in monthly bond purchases until the labor market improves substantially.
The New York and Philadelphia districts “rebounded from the immediate impacts of Hurricane Sandy” while Boston, Richmond and Atlanta reported that growth increased slightly in their districts. Yet, the report said that “labor market conditions remained mostly unchanged in all districts.”
The Beige Book provides anecdotal evidence on the health of the economy. In the previous report on Nov. 28, the Fed said the economy expanded at a “measured pace” and “consumer spending grew at a moderate pace in most districts, while manufacturing weakened.”
The anecdotal accounts were collected on or before Jan. 4 and compiled by the Federal Reserve Bank of Philadelphia.
The report found that all 12 districts reported “some growth in consumer spending” and that “auto sales were reported as steady or stronger” in most districts. Tourism increased due to strong business and international travel and early snowfall in some ski areas.
Growth in residential real estate was “described as moderate or strong” in nine districts, as prices rose in all reports received. New construction was reported higher in 11 of 12 districts.
Contacts in Boston, Richmond, Atlanta, Chicago, Kansas City and San Francisco all reported delayed hiring “often in defense manufacturing, due to fiscal cliff uncertainties,” referring to a legislative dispute over spending cuts and tax increases that went unresolved until Jan. 1.