Fed’s Beige Book lifts hopes for solid recovery across the States

Tim Wallace
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THE US economy is continuing to expand at a “modest to moderate pace,” the Federal Reserve reported last night, as the manufacturing, professional services and retail sectors all recorded strong growth.

However, rising energy and fuel prices are beginning to worry producers and consumers, according to the Beige Book – a regular publication which analyses the economy by region and sector.

All 12 districts registered growth, with New York and Kansas City reporting an acceleration in growth and Minneapolis registering solid expansion.

Car manufacturers are performing particularly well, the report said, with new car sales rising strongly – though high fuel prices may threaten this source of growth.

The relatively healthy outlook was also reflected in the labour market.

“Hiring was steady or showed a modest increase across many districts,” the Fed explained.

“Difficulty finding qualified workers, especially for high-skilled positions, was frequently reported.”

Warm weather boosted activity and particularly tourism across some districts, though a lack of snow hit Minneapolis.

The Beige Book, prepared this time by the Cleveland Fed based on information collected between mid-February and 2 April, has market interest because it is based on anecdotal reports from business people from coast to coast and so reflects real-life conditions.