Moderate expansion in US economy: Fed Reserve

The US economy grew at a moderate pace in recent months while labour market continued to see mixed trends, according to the Federal Reserve. The world’s largest economy, which is witnessing slow expansion, is also grappling with high unemployment levels.

“Reports from the 12 Federal Reserve districts suggest that economic activity continued to expand moderately from November through December,” Fed’s latest Beige Book said. Beige Book offers a snapshot of economic activities in various districts and would set the tone for the upcoming Fed’s monetary policy meeting later this month.

In recent weeks, economic conditions have improved in the districts of Boston, New York, Philadelphia and Richmond. Against the backdrop of high jobless rate - stood at 9.4 per cent in December- the labour market was mixed with indications of layoffs in some districts.

“All district reports indicated that employment levels are rising in atleast some sectors, generally by modest amounts; however, some employers in the New York, St Louis and Minneapolis Districts also mentioned job cuts,” Beige Book said. The report noted that manufacturing activities continued to recover in all the 12 districts and retailers also saw higher sales.

However, residential real estate markets as well as commercial construction activities remained weak. American economy expanded by 2.6 per cent in the three months ended September 2010.