The Federal Reserve said economic growth this fall slowed in four key regions of the United States, including Kansas City, partly because of a dip in consumer spending and worries about the federal budget impasse.
The Beige Book survey released Wednesday said overall growth nationwide from September through early October continued at a modest to moderate pace. Eight of the Fed’s 12 banking districts reported the same growth rate as reported in August through early September.
But the latest survey also showed that the Kansas City, Philadelphia, Richmond and Chicago districts reported slower growth.
The Kansas City region covers seven states: Kansas, the western part of Missouri, Colorado, Nebraska, Wyoming, Oklahoma and northern New Mexico.
The Fed said in its latest Beige Book report that the economy in the Kansas City region “expanded modestly in September after growing at a slightly faster pace during the previous survey period” over the summer.
Growth lagged in this region partly because consumers spent less on automobiles, dining out, and travel and tourism, the Fed noted. In particular, the Fed reported lower tourism activity in part because of “the severe effects of recent flooding in Colorado.”
The Fed also said farm income in the Kansas City district was weaker because of falling crop prices.
Despite some signs of weakness, the Fed reported that manufacturing activity picked up in the region and residential and commercial real estate sales and prices remained strong.
The Fed’s survey will be used by central bank policymakers in their next meeting Oct. 29-30. Economists believe the Fed will maintain its $85 billion monthly bond purchases to offset the effects of the government shutdown.
Generally, businesses around the country remained optimistic about the future. But many noted increased uncertainty because of the federal shutdown, which began Oct. 1, and the debt ceiling debate.