U.S. economy improved in May-Fed’s Beige Book

WASHINGTON, June 9 (BestGrowthStock) – U.S. economic activity
improved nationwide last month, but worries about Europe’s debt
crisis dented confidence, the Federal Reserve said in its Beige
Book collection of anecdotal reports.

“Economic activity continued to improve since the last
report across all twelve Federal Reserve districts, although
many districts described the pace of growth as ‘modest,'” the
central bank said.

The report, compiled by the Chicago Fed based on
information collected through May 28, showed consumer and
business spending picking up and the job market improving
slightly, while inflation remained in check.

That recipe lends support to the Fed’s pledge to keep its
benchmark interest rate ultra-low for an extended period. The
Fed will use this report at its next policy-setting meeting
later this month, and is widely expected to leave rates
unchanged near zero.

Financial activity was little changed since the last Beige
Book, published in April, although some regions reported
improved demand for business loans.

Loan quality was stabilizing or gradually improving in most
districts, although that “remained an issue for banks with
large exposures to real estate.”

The Fed also noted some contacts cited concerns over how
Europe’s fiscal troubles might affect financial and business
conditions, and said uncertainty increased.

The Beige Book, named for the color of the report’s cover,
provides the central bank with anecdotal evidence of the
economy’s health to help guide policy decisions.

Wednesday’s report included details such as:

* Sales of spring and summer apparel were strong in Boston,
New York, Philadelphia, St. Louis, Kansas City and Dallas

* Auto and parts production increased in the Cleveland,
Richmond, and Chicago districts

* Crop planting was generally ahead of the seasonal norm

On the inflation front, the Fed said wage pressures were
limited everywhere except San Francisco, which reported some
upward pressure on employee benefit costs. Prices of final
goods and services were largely unchanged.

Investment Basics
(Reporting by Emily Kaiser; Editing by Neil Stempleman)

U.S. economy improved in May-Fed’s Beige Book