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The U.S. economy expanded “modestly” through mid-November amid steady consumer spending and some brighter signs from manufacturers, a Federal Reserve survey showed.
“In manufacturing, more districts reported an expansion in the current period than the previous one, though the majority continued to experience no growth,” said the report released Wednesday in Washington. “The picture for nonfinancial services remained quite positive,” the report added, while activity in the energy sector “deteriorated modestly.”
The central bank's Beige Book economic report, based on anecdotal information collected by the 12 regional Fed banks through November 18, struck a slightly more upbeat tone than the October report, affirming the Fed's outlook for moderate growth.
“Employment continued to rise slightly overall,” the Beige Book said. “Wage pressures intensified for low-skill positions.”
U.S. central bankers cut the benchmark lending rate three times this year in response to rising global uncertainty over trade policies, slumping investment and too-low inflation.
While growth has slowed, the economic expansion continues and unemployment remained near a 50-year low at 3.6% in October.
“Firms’ ability to raise prices to cover higher costs remained limited, though a few districts noted that companies affected by the tariffs were more inclined to pass on cost increases,” the Beige Book said. “Overall, firms generally expected higher prices going forward.”
The Fed’s preferred gauge of price pressures excluding food and energy rose 1.6% in the year through October. Inflation has run persistently below the central bank’s 2% target for most of the past seven years.
Fed Chairman Jerome Powell said Monday the stance of policy is “likely to remain appropriate’’ as long as incoming economic data verifies their expectations for moderate growth, a strong labor market and inflation near the Fed's 2% goal.
There was little in the report, prepared by the Dallas Fed, that would contradict the central bank's outlook.
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