Fed survey: US economy picked up at end of year
WASHINGTON (AP) — Holiday shopping, strong auto sales and a recovering housing market helped boost the U.S. economy from the middle of November through early January, according to a Federal Reserve survey released Wednesday.
The Fed said 12 of its regional banking districts reported "modest or moderate" growth in the final weeks of 2012. Of those, only St. Louis said growth had slowed from the previous survey, which covered October through early November.
Consumers increased spending at the end of the year in every district. Auto sales were steady or stronger in 10 districts. Nearly all of the districts reported increases in home construction and home sales.
Still, employers in some parts of the country delayed hiring because of uncertainty over the fiscal cliff. Congress and the White House reached a deal on Jan. 1 to prevent sharp income tax increases from hitting most Americans. But they put off decisions on government spending cuts.
The report, called the Beige Book, provides anecdotal information on economic conditions through Jan. 4. Overall, analysts said the survey showed the economy looked better at the end of the year.
"Despite concerns about the dreaded fiscal cliff, the economy looks to have improved slightly in recent months," said Sal Guatieri, senior economist at BMO Capital Markets. He said the latest survey probably had not fully captured the improvement in business sentiment that has occurred with the January deal to avoid most income tax increases.
Congress must still decide what to do about automatic spending cuts that are now set to take effect in March.
The survey showed that companies in six districts — Boston, Richmond, Atlanta, Chicago, Kansas City and San Francisco — held off on hiring because of those looming cuts. Many of the companies are in the defense industry, which is slated for some of the cuts.
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