WORLD
US growth ‘modest to moderate’: Beige Book
Baku, June 6 (AZERTAC). The Federal Reserve`s regional survey has painted a picture of a US economy still putting along at the same pace of the past year, with jobs growing slowly and no threat of inflation.
The Beige Book update on activity in the 12 Fed districts - a key input into monetary policy decisions - said the economy continues to grow at a "modest to moderate" speed, with conditions slowly but steadily improving in the six weeks since the previous report.
Helped by the surge in home building, manufacturing as well as services continued to expand across the country - contradicting some recent data suggesting that the manufacturing sector was contracting.
Consumer spending growth was mostly slow, and bank lending continued to rise.
Prices remained restrained while hiring "increased at a measured pace in several districts," the report said.
Wage pressures "remained contained overall" despite rises in certain jobs.
Analysts said the Fed`s tweak of its overall description of activity to "modest to moderate" from "moderate" in the April Beige book amounted to a subtle downgrade of its view.
But the details in the report suggested that economic growth had not changed significantly from the 2.4 per cent pace of the first quarter.
That gives little impetus to the Fed`s policy board, the Federal Open Market Committee, to immediately begin tailing back its quantitative-easing bond purchases at its next meeting on June 18-19.
Speculation has been rife over when the FOMC might begin to reduce its $US85 billion ($A88.53 billion) a month bond buys, aimed at pressing down interest rates.
A surge in US bond yields shows that investors expect the decision to come soon.
But Fed Chairman Ben Bernanke, as well as other Fed officials, have warned that cutting the QE program too soon was risky for the frail economy, and stressed that they need to see several months more of data to be confident.