US Fed calls growth 'modest to moderate'

The US economy has experienced modest to moderate growth since late November, the Federal Reserve Bank said Wednesday. The Beige Book report, released eight times a year and named for the color of its cover, said consumer spending rose in all 12 Fed districts in the past six weeks, a critical factor for the economy, but especially so during the holiday season. Automobile sales were "steady or stronger" in 10 of the 12 districts, with dealers reporting high levels of inventory in the Chicago and Kansas City districts. Existing home sales held steady or rose in 11 districts, while home construction picked up in eight and sales of commercial property improved in 11. The Boston District reported leasing activity was uncharacteristically down as "contacts cited fiscal cliff uncertainty as a factor," the Fed said. Two districts, Kansas City and Minneapolis, reported "increased demand and tightening commercial real estate markets," although "non-residential construction is weaker than residential with only slight to modest growth," the report said. Although spending rose, "trends in wages, prices, and employment conditions were relatively unchanged," the Fed said, making the spending increase difficult to explain. Nonetheless, "holiday sales grew modestly" in all 12 districts and spending on tourism grew in seven of eight districts that reported on tourism. The Fed said manufacturing was "mixed" and the consumer credit largely unchanged since late November. "Price pressure was stable," the Fed said. The Bureau of Labor Statistics reported Wednesday the Consumer Price Index for 2012 came in at 1.7 percent on an annual basis in 2012, down from 3 percent in 2011.