US Seeing ‘Modest’ to ‘Moderate’ Growth
The United States is starting to see growth in the economy to take hold but it is still only moderately creeping up. This is not necessarily a great cause for concern as all areas are on the rise.
The Federal Reserve’s latest Beige Book reports stated that there has been growth in eleven of the twelve Federal Reserve districts with one, being Boston, saying that activity was uneven. Half of those districts reported ‘modest’ growth which, although not greatly progressive, is a good sign for the economy with a further five declaring growth to be ‘moderate’.
It was gains in several significant sectors that aided this growth with consumer spending, manufacturing and commercial construction contributing to this list but with some areas like construction and manufacturing seeing upward wage pressures it is important for them to maintain what little growth they have.
Muted growth did occur in retail where some general stores reported sales were weak but on the whole the news is fairly positive. The survey is based on anecdotal reports from businesses and will be considered with other data when Fed policymakers meet on 28-29 October.
The Federal Reserve found that comments were in line with their reports previously gathered for Beige Book reports and said that “Most Districts reported overall growth in consumer spending that ranged from slight to moderate,”
With a recent upswing in America’s fortunes the Federal Reserve has been considering raising their benchmark rate of inflation which has remained at 0% since the financial crisis hit in 2008. Many investors have been pouring money into stocks to make the most of this low rate of inflation and this, in turn, has had a positive effect on the markets and the economy as a whole.
The American economy has been moving forward at a fairly steady rate recently with job creation and growth both on the up so further positive news is always going to be a boost although investors will always be wary of an inflation rate rise. Last week, US markets saw a resurgence after the minutes of the Federal Reserve’s latest meeting were released as they revealed that central bankers were wary of raising interest rates which US markets cheered.