UPDATE 1-U.S. economy improving modestly-Fed’s Beige Book

(Adds additional details, quotes)

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 12 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 business contacts in 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
districts. In the Boston district, retailers noted “some
potholes in the recovery path” but said sales were generally
positive.

* 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, although San Francisco reported some upward pressure
on employee benefit costs. Prices of final goods and services
were largely unchanged.

ST. LOUIS JOINS IN

In the St. Louis region, which was the only one of the 12
that did not report a strengthening economy in the previous
Beige Book, manufacturing activity increased.

“A greater number of contacts reported new hires and plant
openings than reported job layoffs and plant closings,” the
report said.

The Boston Fed said some of the staffing firms in its
region reported a mismatch between job seekers and the needs of
employers.

“One contact notes that hundreds of college graduates are
looking for work but available positions often require more
experience,” it said.

In the New York region, Broadway theaters reported that
business has picked up noticeably, after slowing a bit in
mid-April.

Investment Advice
(Reporting by Emily Kaiser; Editing by Andrea Ricci)

UPDATE 1-U.S. economy improving modestly-Fed’s Beige Book