Gains in manufacturing, technology and housing kept the U.S. economy expanding at a “modest to moderate” pace from early October through mid-November, the Federal Reserve said.
“Hiring showed a modest increase or was unchanged,” the central bank said today in its Beige Book business survey, which contains anecdotal reports from the 12 Fed district banks two weeks before the officials meet to set monetary policy. Consumer spending increased in most of the country, with retailers expressing optimism about holiday sales.
“Manufacturing activity continued to expand in most districts, with gains noted in the motor-vehicle and high- technology industries,” the Fed said. “Demand for professional business services experienced stable to moderate growth, especially in computer technologies.”
The report gives policy makers clues to the state of the labor market and the economy as they debate whether to start reducing $85 billion in monthly bond purchases. Companies boosted payrolls last month by the most in a year, according to a private report today, and government data in two days are forecast to show the jobless rate declined.
“Residential real estate activity improved across many districts, with multifamily construction experiencing moderate to strong growth,” the Fed said. “Activity in nonresidential real estate was stable or improved slightly across many districts.”
Banking conditions were reported as “largely stable,” and loan demand improved. Several districts saw an “easing of lending standards,” the Fed said.
Fed Vice Chairman Janet Yellen, nominated to succeed Chairman Ben S. Bernanke, signaled Nov. 14 she will push on with stimulus until seeing improvement in an economy that’s operating below potential. Bond buying by the Federal Open Market Committee, which meets Dec. 17-18, has ballooned Fed assets to a record $3.93 trillion.
Yellen said during her confirmation hearing before the Senate Banking Committee that unemployment is “still too high, reflecting a labor market and economy performing far short of their potential.”
Companies expanded payrolls in November by 215,000, according to the ADP Research Institute in Roseland, New Jersey. The increase exceeded the most optimistic forecast in a Bloomberg survey and following a revised 184,000 gain in October that was larger than initially estimated.
Demand for new hires is biggest in “booming” information technology and health care, said Jeanne Branthover, a managing partner at Boyden Global Executive Search in New York. The firm has been “incredibly busy” as firms step up staff and transfer workers to jobs in other locations.