WASHINGTON (12/5/13)--The national economy continued to expand at a modest to moderate pace from early October through mid-November, according to the Federal Reserve's Beige Book for October, released Wednesday.
Reports from seven of the 12 Federal Reserve Districts indicated the economy grew at a moderate pace. Four districts reported modest growth. One district, Boston, reported expanding economic activity.
Consumer spending increased at a modest to moderate pace in almost all districts, with retailers offering tempered optimism for the holiday season. Sales of new motor vehicles continued at a moderate to strong pace across most districts, while used-car sales were mixed. Reports on tourism varied, with some locations experiencing lower traffic due to the government shutdown.
Residential real estate activity improved across many districts, with moderate to strong growth in multifamily construction. Some slowing in single-family home sales was attributed to seasonal factors. Five districts reported historically low inventories of unsold homes. Activity in nonresidential real estate was stable or improved slightly across many districts.
In banking and finance, lower residential mortgage activity was reported in many districts. Some financial institutions attributed the decline in part to higher interest rates than earlier in the year. Several districts reported increased credit quality, as delinquencies have continued to decline and fewer problem loans have been reported. An increase in business-credit activity was seen in a number of districts.
In the Philadelphia, Richmond, Atlanta, Chicago, and San Francisco districts, some bankers eased lending standards in response to aggressive competition for quality loans," the book said. "Lending standards remained unchanged across loan categories in New York, Cleveland, St. Louis and Kansas City. Consumer borrowing weakened in a few districts, including New York, Richmond, and St. Louis. In Cleveland, Kansas City, and Dallas, demand for consumer loans was little changed, while it increased in Chicago."
A modest increase in hiring was reflected in the Philadelphia, Richmond, St. Louis, Minneapolis and Dallas districts, while hiring in the remaining districts was largely unchanged. Industries that reported moderate employment growth included construction, software and IT services, manufacturing, and healthcare.
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