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Fed's Beige Book Says Economy Increased At Modest Pace

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Economic activity continued to increase across all Federal Reserve districts, according to the central bank's Beige Book report released on Wednesday.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the pace of economic growth characterized as slight to modest in most districts.

The report said manufacturing activity generally increased at a moderate pace, while residential housing markets continued to experience steady demand for new and existing homes.

Banking contacts also cited increased demand for mortgages as the key driver of overall loan demand, the Fed said.

Meanwhile, the Fed said commercial real estate conditions continued to deteriorate in many districts, with the exception being warehouse and industrial space where construction and leasing activity remained steady.

The report also said consumer spending growth remained positive, but some districts reported a leveling off of retail sales and a slight uptick in tourism activity.

Employment increased in almost all districts, the Fed said, although growth remained slow. Job gains were reported most consistently for manufacturing firms, but firms continued to report new furloughs and layoffs.

On the inflation front, the Beige Book said prices rose modestly across districts since the previous report. Input costs generally increased faster than consumer prices, although some sectors—notably construction, manufacturing, retail, and wholesale—passed along the higher costs to consumers.

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