The Federal Reserve said the U.S. economy kept expanding in October and November, helped by solid gains in consumer spending, manufacturing and overall employment.
The Fed’s latest review of business conditions around the country found many areas of strength. The survey, known as the Beige Book, for the first time this year did not see a need to qualify growth by using words like “modest” and “moderate.”
The Fed also reported broad-based employment gains across U.S. industries and regions, two days before the Labor Department issues its highly anticipated monthly jobs data.
“Employment gains were widespread,” the Fed said Wednesday in its business survey, which is based on reports gathered on or before Nov. 24. “A number of districts also noted that contacts remained optimistic about the outlook for future economic activity.”
The report offers Fed policymakers anecdotal evidence about improvements in the job market as they consider when to raise interest rates for the first time since 2006.
“This is part of the slow march toward an eventual rate hike,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wis. The Fed report suggests “the timing of liftoff should be unchanged, hanging around the June meeting.”
Employment gains were spread across all 12 Fed districts, including Kansas City.
The report will form the basis for discussion at the Fed’s final policymaking meeting of the year on Dec. 16 and 17. The report suggests the Fed will leave a key short-term interest rate at a record low for the time being.
The Fed’s 10th District, monitored by the Federal Reserve Bank of Kansas City, reported slight economic growth in October and November. The Fed also said most survey respondents expected some growth over the coming months.
According to the Kansas City Fed, consumer spending increased modestly with retail contacts reporting moderate growth and auto, restaurant and tourism contacts reporting a slight decline. Manufacturing production rose slightly, and overall manufacturing activity “was anticipated to strengthen further over the next few months.”