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The Federal Reserve issued a modestly upbeat assessment of business conditions around the country Wednesday, stating, "economic activity has been improving slowly in most of the nation."

The report, the Fed's last summary of regional economies before the election, found weakening conditions only in the San Francisco and Chicago districts."Cleveland, Dallas, Kansas City, Philadelphia and Richmond report modestly improved conditions in their districts," said the report, known as the "beige book."

"The remaining districts generally reported a continuation of slowly expanding activity," it said.

Although Wednesday's report included cautions - such as "the pace of recovery has been uneven across many regions and sectors" - it nevertheless was slightly more positive than the last beige book, released on Aug. 5.

"Retail sales are reported steady or slightly higher by most districts, but auto sales are lackluster," it said. "Manufacturing activity has weakened in autos, aerospace and defense-related industries. Outside these sectors, however, improvement is noted in orders, production and sales."

The Fed report was compiled from information gathered by its 12 regional banks, based on interviews with business people conducted before Sept. 15. It will be used by top monetary policymakers when they meet Oct. 6 to review their interest-rate polices.

Since mid-1989, the central bank has reduced interest rates 24 times in an attempt to stimulate the stagnant economy.