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The economy continued to grow on a "modest to moderate" track over the last month, with consumer spending and job growth fueling improvements in other economic sectors, according to the latest update from the Federal Reserve.
In its most recent Beige Book report, the Fed recorded moderate growth in half of its 12 districts, including Cleveland, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco. Contacts reported modest growth in New York, Philadelphia, Richmond, Atlanta, and Kansas City.
The standout was Boston, where "reports from business contacts painted a mixed picture of economic conditions."
With two weeks to go until the Federal Open Market Committee's next policy meeting, Wednesday's report further bolsters the popular prediction that the central bank will vote to end its monthly bond-buying program and look ahead to raising short-term interest rates. There's one more Beige Book due this year—scheduled for release December 3—which could offer a clearer glimpse into a timeline for rate hikes.
Overall, most Fed districts characterized local growth in consumer spending as slight to moderate, the central bank reported, "and at a pace roughly similar to that reported in the previous Beige Book." Spending was particularly promising in the Boston, Richmond, Chicago, St. Louis, Minneapolis, Kansas City, and Dallas districts, which all saw moderate growth.
Employment growth was also more or less the same as in September's report, with most districts reporting difficulty for some employers in finding qualified workers.
Wage growth was described at most around most districts, though some reported upward pressures for certain industries and occupations, including skilled labor in construction and manufacturing.
In construction news, reports were mixed nationwide, though homebuilding improved in many districts—including Cleveland, where single-family construction starts reached their highest level year-to-date. Growth was more tepid in districts like Philadelphia and Richmond, while New York contacts reported sluggish single-family construction numbers but improved multifamily starts.
Home sales data was also mixed. According to the Fed, real estate contacts in Atlanta indicated existing-home sales and prices were ahead of last year, while San Francisco saw sales stabilize since the last report. Meanwhile, sales in Chicago came in lower than last year, while growth in home prices and rents slowed.
Finally, banking conditions continued to improve since the last Beige Book release, though consumer loan demand leveled off in several districts and rose only slightly in others. The Fed noted that refinance demand for all types of consumer loans was down in New York, Philadelphia, and parts of Richmond.
Credit quality was largely stable relative to September's report, with New York, Philadelphia, and San Francisco reporting improvements. Meanwhile, credit standards remained generally unchanged, though contacts around Philadelphia "said that heated competition for loans was resulting in a slight rise in credit risks."
