The U.S. economy maintained a “modest to moderate pace” of growth in recent weeks, bolstered by industries from housing to manufacturing, the Federal Reserve said Wednesday.
“Residential real estate and construction activity increased at a moderate to strong pace in all reporting districts,” the Fed said in its Beige Book business survey, which is based on anecdotal reports from its 12 regional banks, including Kansas City. “Manufacturing expanded in most districts since the previous report.”
The report was released the same day Fed Chairman Ben Bernanke told Congress that central bankers will be “responding to the data” as they decide when to start reducing their $85 billion monthly pace of asset purchases. The Beige Book, prepared for their next gathering in Washington on July 30-31, will be one piece of evidence they consider.
“Hiring held steady or increased at a measured pace in most districts, with some contacts noting reluctance to hire permanent or full-time workers,” the report said. Fed officials are closely monitoring the labor market to determine whether it has “improved substantially,” allowing them to wind down their bond purchases.
In the seven-state region covered by the Federal Reserve Bank of Kansas City, the economy “grew modestly” in June and “expectations for future activity improved slightly,” the Beige Book noted. The Kansas City district includes Kansas and the northwestern part of Missouri.
The Kansas City Fed said tourism and restaurant sales edged up last month, while retail and automobile sales were steady since the last survey in the spring. Residential real estate activity remained strong and commercial activity increased slightly, the report said.
On the other hand, regional manufacturers reported business slowdowns because of tornadoes and other destructive spring weather. “Labor shortages ticked up, but wage pressures remained modest,” the Kansas City Fed said.