Economy expanded at a moderate pace in late August, says Fed Beige Book – State of Minas

Washington, 07 – The US economy expanded at a moderate pace in July and August, the Federal Reserve said on Wednesday, a sign that the country can continue on its slow growth path in the third quarter. In the report known as the Beige Book, an assessment of regional economic conditions, most districts saw growth “modest” or “moderate” in the last two months. The survey collected information on economic activity from the beginning of July and 29 August, 12 district Feds. Respondents said they expected growth to continue at a moderate pace in the coming months.The most districts reported tight labor markets, with a moderate increase in hiring. Wage pressure continued to increase, especially for workers with specific skills such as engineers and certain construction workers. This, however, has not translated into significant inflationary pressure. The high price was considered mild in general.

Consumer spending, which had been one of the pillars of economic growth in the second quarter, had little change in most districts, except for a slight slowdown in auto sales in five districts. Auto sales were record in 2015 and remain strong, but it is not known if this pace is sustainable.

The manufacturing activity has slightly increased in most districts. The sector seemed to have stabilized in the spring and the northern hemisphere summer, although a report released last week has shown a contraction in August.

The activity in the housing sector also continued to expand, but the Book beige showed that the limited supply was affecting the pace of sales in some districts. The commercial real estate sector also continued to grow, according to the report.

According to the Beige Book, non-financial services sales accelerated in the period covered by the survey, with growing demand at restaurants for services health and personal services. However, an index of service sector activity published yesterday showed a sharp drop in August to the lowest level in more than six years. Even so, the sector, which is responsible for most of the jobs in the US, continued to grow last month, albeit at a slower pace than in July.

According to banks, credit quality remained “favorable” in most districts. Demand for loans increased at a moderate pace, in general, although it varied greatly from one district to another. In Dallas and Kansas City districts with energy major industries, some oil and gas companies reported difficulties in obtaining credit. During the period, respondents also reported lower demand for products related to energy, although the report noted “some signs of stabilization.” Meanwhile, a possible record crop weighed on prices of agricultural products.

The Federal Monetary Policy Committee (FOMC) meets on 20 and 21 September to decide on interest in the country. The Fed Chairman Janet Yellen said in late August that the argument for increased federal-funds rate has been gaining strength in recent months. However, more than two thirds of economists surveyed by a poll of

The Wall Street Journal

in August expected an increase of interest only in December. Source: Dow Jones Newswires.