By Yali N’Diaye

WASHINGTON (MNI) – Economic activity has “generally expanded modestly”
since August, the Federal Reserve said Wednesday in its latest survey of
conditions around the country .

This modest pace of growth was not enough to make any significant
change in employment conditions on which the central bank has its focus
on, the Fed said in the so-called beige book.

As a result of “little changed” employment conditions “wage pressures
remained” modest, according to the report prepared by the New York Fed based on
information available through September 28.

The Fed noted “little change in prices of both finished goods and inputs”
despite higher prices for agricultural commodities and petroleum-based products.

“Consumer spending was generally reported to be flat to up slightly
since the last report” published at the end of August, however, overall spending
was “mixed,” and “A number of reports noted various factors affecting sales,
such as rising gasoline prices, political uncertainty, concerns about the
‘fiscal cliff’ and weather.”

Consumer spending on vehicles was generally “stable,”, although the
report characterized it as being higher than a year earlier and at
“favorable levels.” The report noted that while new vehicle sales were
“steady to stronger and running ahead of comparable 2011 levels,” sales
of used car were “mixed.”

In tourism, activity was described as “stead at robust levels”
despite some indications of softening.

In the real estate sector that is considered central for the recovery,
“conditions improved” in the residential sector, with most districts reporting
“strengthening in existing home sales, while prices were described as steady to
increasing.” In some instances, the report said, existing home prices increased
“substantially.”

Looking at new homes, construction and sales were “mixed” although
mostly improving. And in commercial real estate, conditions were “mixed”
compared with August.

So were conditions in the manufacturing sector, “though on balance, more
Districts reported that conditions had improved than worsened.”

In the agricultural sector, where conditions were “mixed,’ the
drought continued to impact the country’s “mid-section.”

Activity in the energy sector, on the other hand, “remained strong.”

In the banking and financial sector, the beige book reported
slightly “stronger” loan demand, while “credit standards were little
changed since the last report.”

“A number of Districts noted improvements in loan quality or steady
to declining delinquency rates,” the beige book also said.

In nonfinancial services, the report noted “some improvement” as
conditions were generally described as “stable to slightly stronger.”

The survey findings were summarized will be reviewed by the Fed’s
policymaking Federal Open Market Committee when it meets in Washington
October 23-24.

** MNI Washington Bureau: 202-371-2121 **

–email: yndiaye@mni-news.com

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