Economy Is Growing At A 'Measured Pace,' Federal Reserve Says

By Mark Memmott

Published November 28, 2012 at 1:29 PM CST

Shoppers at a Target store in Westbury, N.Y., last week. Consumer spending drives the economy. And the holiday shopping season is crucial for retailers.

The nation's economy "expanded at a measured pace" in recent weeks, the Federal Reserve Board reports in its latest anecdotal look at how things are going across the U.S.

The central bank's Beige Book review of conditions in its 12 bank districts finds that:

"Cleveland, Richmond, Atlanta, Chicago, Kansas City, Dallas, and San Francisco grew at a modest pace, while St. Louis and Minneapolis indicated a somewhat stronger increase in activity. In contrast, Boston reported a slower rate of growth.

"Weaker conditions in New York were attributed to widespread disruptions at the end of October and into November caused by Hurricane Sandy. Philadelphia reported general weakness that was exacerbated by the hurricane. However, in the Boston and Richmond Districts, the storm's effects were mostly limited. Contacts in a number of Districts expressed concern and uncertainty about the federal budget, especially the fiscal cliff."

All told, the report seems to add to the evidence that the economy continues to slowly move along — not fast enough to bring unemployment down significantly, but just strong enough to keep unemployment from rising.

The Beige Book (named for the color of its cover) is prepared eight times a year for meetings of Fed policymakers. It is based on interviews with employers and others around the country.

On the key issue of consumer spending, the Fed says it:

"Increased at a moderate pace in most Districts in recent weeks, with mixed reports from Dallas. In New York, sales were ahead of plan prior to Hurricane Sandy, and merchants expect to recoup sales lost during the storm as residents replace destroyed or damaged property.

"Philadelphia contacts reported slower growth since the last report. Apparel sales picked up in Boston, and Richmond indicated that home and garden stores reported stronger sales ahead of Hurricane Sandy.

"Durable goods sales varied across Districts. For example, Boston and Chicago noted an improvement in furniture, while sales in that category declined in Cleveland. Chicago reported flattening in electronics sales, whereas San Francisco contacts reported significant sales gains for consumer technology products."