WASHINGTON -- U.S. economic growth accelerated slightly as summer ended and fall began, supported by modest hiring, an uptick in consumer spending and steady homebuilding, according to the Federal Reserve.
The Fed's "Beige Book" survey of economic conditions in its 12 regional bank districts, released Wednesday, found that growth was modest or moderate in eight districts, slight in three, and flat in the New York district. That's an improvement from its September survey, which found that growth weakened in two districts and was unchanged in two.
The mild improvement could encourage Fed policymakers to lift short-term interest rates by their December meeting.
Hiring was steady across most of the country, though there were layoffs at factories in the New York, Philadelphia, Cleveland and Richmond districts. Steady job gains lifted wages in most districts.
The St. Louis district, which includes Arkansas, reported modest consumer spending growth, stronger loan demand and farmers expecting record yields.
The report from St. Louis said there has been high demand for labor in some industries. A contact in Little Rock told Fed officials of "widespread difficulties in filling vacant positions, especially those in skilled trades."
Activity in residential real estate showed moderate improvement in the St. Louis district with August home sales increasing by 13 percent in Little Rock and St. Louis and 14 percent in Memphis.
The Beige Book, which is based on discussions with business leaders in each region, will be considered at the Fed's next meeting Nov. 1-2. Wednesday's report covered the period from late August through Oct. 7.
Fed policymakers at the November meeting will weigh whether to raise the short-term interest rate, which they control.
Most analysts expect the Fed to wait next month and to make any moves after the elections. If the economy keeps growing, economists expect the Fed will raise rates in December.
The rate was pinned at nearly zero for seven years during the recession and slow recovery. The Fed increased it to between one-quarter and one-half a percentage point last December.
The survey found that employers reported offering higher pay for many skilled workers in industries such as construction, manufacturing, health care and information technology.
But similar pressures also appeared in lower-skilled industries: Retailers and tourism operators in New England were forced to raise wages to attract workers, the Boston district said.
The Richmond district said businesses were struggling to find construction workers, hotel and restaurant staff, farm hands, engineers, and managers.
Consumer spending was healthy overall. Sales of luxury goods were strong in the San Francisco district. Attendance at Broadway theater shows in the New York district rose in September and was higher than a year ago.
Auto sales were flat or declined in about half the Fed's regions, including New York, Philadelphia, Cleveland, Atlanta and Kansas City. Yet they grew in other districts, including St. Louis and San Francisco.
Business on 10/20/2016