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Sunday 07th of March 2010
March 4, 2010    

US Fed’s influential Beige Book sees modest growth

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by Kay Murchie
”US

The latest publication of the US Federal Reserve’s influential Beige Book reported that the world’s largest economy has continued to grow this year but at a “modest” pace.

The Beige Book, which is compiled eight times a year, is based on reports and comments from businesses throughout the US.

It said despite a pick up in consumer spending, severe snowfall in many parts of the US hampered growth.

Earlier this week, the Commerce Department said US consumer spending rose faster than expected in January by 0.5% - the fourth consecutive monthly rise.

The rise in consumer spending, which makes up for more than two-thirds of overall economic activity in the US, was better than expectations of 0.4%.

Meanwhile, last week it was revealed the world’s no.1 economy grew at a faster rate in the fourth quarter than previous estimates showed.

According to official figures, the US economy grew by an annual 5.9% between the October and December period, rather than the 5.7% previously estimated.

In the meantime, the book said: “Manufacturing activity strengthened in most regions, particularly in the hi-tech equipment, automobile and metal industries.”

However, the Beige Book, which is used to help set interest rates, said there are still concerns for the housing market. It said: “Most districts characterised commercial real estate and construction activity as weak or having declined further.”

In addition, it said labour markets remained weak but according to many economists, the jobs picture is gradually improving.

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