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Fed's Beige Book Notes Continued Modest U.S. Economic Growth

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In a look back at the final six weeks of 2019, the Federal Reserve's Beige Book said Wednesday that U.S. economic activity generally continued to expand modestly.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the Dallas and Richmond Districts saw above-average growth, while Philadelphia, St. Louis, and Kansas City reported sub-par growth.

Consumer spending growth was described as modest to moderate, with holiday sales said to be solid amid the increasing importance of online shopping.

The Fed said employment was steady to rising modestly in most districts, while labor markets remained tight throughout the nation.

"Most Districts cited widespread labor shortages as a factor constraining job growth, and, in a few cases, business expansion," the Fed said.

Tariffs and trade uncertainty also continued to weigh on some businesses, although the release of the report comes the same day that the U.S. and China officially signed a phase one trade deal.

With regard to inflation, the Beige Book said prices continued to rise at a modest pace during the reporting period, as did input costs.

The Fed also said expectations for the near-term economic outlook remained modestly favorable across the nation.

The Beige Book is typically released about two weeks before the Fed's next interest rate decision, with the first monetary policy meeting of the new year set for January 28-29.

Interest rates are widely expected to be left unchanged at the meeting, with the Fed recently signaling that rates will remain at current levels for the foreseeable future unless there is a material change in the economic outlook.

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