The Fed’s Beige Book report, a business survey based on accounts from the 12 Federal Reserve banks, reflected modest growth in the economy in September led by the housing and auto sales sectors. The labor market held steady.
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Consumer spending was flat to slightly up from the last report and manufacturing was somewhat improved. The housing market showed widespread improvement.
The Beige Book provides a reading on the economy’s health two weeks before the Federal Open Market Committee (FOMC) meeting on October 23 and 24. This month's report offers support to Fed chief Ben Bernanke’s assessment that the economy is not strong enough to bring quick relief to the labor market on its own.
The word modest is a slight step down from moderate, the word used to describe the economy earlier in 2012. And although the unemployment rate declined by a surprising amount in September, payroll growth slowed a bit.
Six of the 12 districts reported modest growth while three others reported moderate growth.
The remaining three districts reported that growth had slowed.
Information for the Beige Book was collected before September 28 and was summarized by the New York Fed.
Data from the Labor Department has shown growth in payrolls even as the Congressional Budget Office (CBO) has warned that the economy will fall into recession if current tax laws expire.
The so-called fiscal cliff is the biggest question on investors’ minds and the Fed noted last month the risks to economic growth from the fiscal cliff, a slowdown in the global economy
, or a worsening of the European crisis.