Fed Says Moderate Growth Continues
Most areas of the United States reported moderate economic growth through the first weeks of November and labor markets were tight in many regions, the Federal Reserve said on Wednesday.
Growth accelerated in the districts of the New York and Richmond Fed banks, but slowed from a high level in the Dallas region and was mixed in the Atlanta district, the Fed said in its Beige Book summary of economic conditions.
The Beige Book is composed of reports from the areas covered by each Fed bank.
A number of districts reported tight labor market conditions, especially for high-skilled occupations, the Fed said. At the same time, wage growth remained moderate and most districts reported that prices had moderated for construction materials and energy products.
The Fed's policy-making committee will take Beige Book reports into account when it meets on Dec. 12 to decide whether to hold benchmark interest rates steady at 5.25 percent.
Fed Chairman Ben Bernanke said on Tuesday he expects the economy to expand at a moderate pace and inflation to ease gradually, but that the risks for inflation were to the upside. The central bank considers inflation levels to be higher than desirable and is watching new economic data closely to determine whether any policy action will be necessary to ease inflation.
Most Fed districts reported that overall housing market activity continued to slow and said they had experienced declining sales of single family homes and rising inventories, the Beige Book said. There were also scattered reports of house price reductions, the Fed said.
The cooling housing market has been a drag on U.S. economic growth in much of 2006.
Manufacturing activity was generally positive in most districts, however, with reports of weakness concentrated among producers linked to the housing and automotive industries, the