Sales of automobiles and houses drove economic improvements across the nation last month according to the Fed’s Beige Book report.
The report was prepared for the Federal Open Market Committee meeting January 29 – 30 and may increase the push to continue the Fed’s bond purchasing programs until unemployment improves significantly.
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The labor markets have not yet improved as much as the Fed has wished. The Beige Book provides anecdotal evidence on the health of the economy.
The report found all 12 districts showed improvement in consumer spending; tourism increased due to strong business, international travel, and snowfall in some ski areas; and an increase in auto sales.
Growth in residential real estate was moderate or strong in nine districts and all 12 reported higher prices.
The S&P Case-Shiller index of home prices in 20 cities rose 4.3% in October from one year ago and the Beige Book indicates prices will go higher.
A separate report said industrial production increased for a second consecutive month in December because of increased demand for business equipment.
Confidence among homebuilders remained at the highest level in six years for January, a good sign for the housing market.
As the economy strengthens, it will be better able to weather fiscal hurdles
such as the debt ceiling.