Slight expansion in US economy in recent weeks: Fed Beige Book

Three regions exhibited modest or moderate growth that offset flat or slightly declining activity in two others. Though growth in economic activity was generally small, expectations for growth rose moderately across most geographies and sectors.

Business contacts expressed optimism that demand will rise in coming months. Consumer spending was generally stable.

Many consumer-oriented businesses across districts noted further increases in price sensitivity among consumers, as well as several reports of increased sensitivity to quality.

Spending on home furnishings was down, which contacts attributed to limited household mobility. Commercial real estate lending was similarly subdued.

Capital spending and purchases of raw materials were flat or declining in most districts.

Employment levels were flat or up only slightly across districts. Hiring activity was subdued as worker turnover remained low and few firms reported increasing their headcount. The level of layoffs was also reportedly low.

Contacts indicated they expected employment to remain steady or rise slightly over the next year, but many were cautious in their optimism about any pickup in hiring activity, a release from the Fed said.

Wage growth softened to a modest pace across most districts, as did expectations for wage growth in coming months.

Prices rose only at a modest pace across Fed districts. Both consumer-oriented and business-oriented contacts reported greater difficulty passing costs on to customers.

Input prices were said to be rising faster than selling prices for most businesses, resulting in declining profit margins. Although input prices rose generally, contacts in several Districts noted declines in certain raw materials and non-labour costs.

Fibre2Fashion News Desk (DS)