The FRS stated today that the economy developed“modestly” last month in the U.S.A, supported by improvements in housing and auto sales, and somewhat change in labor market.
The economic expansion in the second quarter slowed to 1.3% vs 2% in 1 quarter and 4.1% in the 4 quarter of last year.
The U.S. economy in recent weeks has shown signs of strengthening. Manufacturing expanded in September after three months of contraction, according to the Institute for Supply Management’s factory index. The index rose to 51.5 last month from 49.6 in August, with readings above 50 indicating expansion.
“Consumer spending was generally reported to be flat to up slightly since the last report,” the FRS informed via its Beige Book business survey, which is based on accounts from the 12 district Fed banks. Conditions in manufacturing were “somewhat improved,” according to the report, which provides anecdotal evidence on the health of the economy two weeks before the FOMC meeting on Oct. 23-24.
The New York district reported economic activity had “leveled off” and Kansas City indicated “some slowing in the pace of growth,” but “in general, other districts reported that growth continued at a modest pace,” according to the Beige Book.
The housing market showed “widespread improvement since the last report,” according to the FRS with all twelve districts reporting that “existing home sales strengthened, in some cases substantially.”
While “employment conditions were little changed since the last report,” several districts reported shortages of highly skilled workers, the Beige Book said.
The unemployment rate in the U.S.A. fell to 7.8% in September, the lowest since January 2009, according to the Bureau of Labor Statistics’ survey of households.
Boston, Cleveland, Atlanta, Minneapolis and Dallas said employment was “flat or up slightly, with stagnant demand and uncertainty related to the upcoming presidential election, U.S. fiscal policy, and European debt issues cited by some as a restraining hiring.”
Job openings in the U.S. dropped for a second straight month in August, indicating companies are reluctant to beef up payrolls through year-end without faster economic growth, a Labor Department report showed today.
Stocks remained lower after the report. The Standard & Poor’s 500 Index was down 0.7% to 1,431.82.