Fed: US economic growth healthy over holidays

Published on NewsOK Modified: January 15, 2014 at 3:07 pm •  Published: January 15, 2014
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WASHINGTON (AP) — A Federal Reserve survey shows economic growth remained healthy in most U.S. regions in late November and December, helped by gains in consumer spending and factory output.

Nine of the Fed's 12 banking districts described growth as moderate, according to the Beige Book survey released Wednesday. That's up from seven districts in October through early November. And two of those districts said growth had accelerated since the previous report.

Only two districts -- Boston and Philadelphia -- said growth was modest, while Kansas City said it "held steady."

Three-quarters of the districts said shoppers spent more over the winter holidays. And all but Kansas City said manufacturing production grew.

The Beige Book survey is based on anecdotal reports from businesses and will be considered along with other data when the Fed meets next Jan. 28-29.

The report showed little signs of the slowdown in hiring that the government reported last week. The Labor Department said Friday that employers added only 74,000 jobs last month, down from an average of 214,000 in the preceding four months.

The Fed survey, however, said two-thirds of the districts reported increases in hiring. That may bolster the view among many economists that December's hiring slowdown was temporary and partly the result of bad weather.

Still, weaker December job gains could lead the Fed to rethink its recent decision to pull back on some of its stimulus.

Fed policymakers decided last month to cut the monthly purchases to $75 billion from $85 billion and suggested it would further trim its buying in future meetings. The bond purchases are intended to spur more borrowing and spending.

But Dana Saporta, an economist at Credit Suisse, said the report was positive enough to suggest that the Fed will continue reducing its purchases.

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