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The so-called Beige Book, the compilation of business conditions prepared for the U.S. Federal Reserve by its member Districts--in this case, the Federal Reserve Bank of Dallas--reported that the U.S. economy expanded at a moderate pace between early April and late May. However, economic turbulence in Europe and the uncertain political outlook in this election year at home worried some employers. These concerns would appear to be keeping such employers from hiring more aggressively--a fact that was affirmed by the very tepid increase in non-farm payrolls reported last Friday.

The Beige Book's findings are based on anecdotal evidence collected from business contacts spread across the nation and take in each of the central bank's 12 Fed Districts.

Overall, hiring was steady during this period, which was not encouraging given the paucity of new jobs that have been created over the past three months, and manufacturing continued to expand, as we saw in last week's report from the Institute for Supply Management. There was particular strength in auto and steel manufacturing. This latter strength, which represents a positive change from earlier in the year, could be a hopeful sign for the economy down the road.

The central bank noted that things were generally positive, although many contacts seemed more guarded in their assessment than earlier in 2012, citing the aforementioned economic crises in Europe and the fractious political divide in this country.

As for other sectors of the economy showing improvement, we saw growth in consumer spending, travel and tourism, loan demand and residential and commercial real estate. However, concerns were voiced about how lawmakers would deal with tax increases and spending cuts, which are scheduled to kick in at the start of 2013. There appears to be no movement in Congress to reduce these worries, both of which have the potential to wreak havoc on our economy if such schedules are not amended. At this point, there seems little appetite to move forward on either side of the aisle.

As for new measures to further stimulate the U.S. economy, there is a sense that some movement could be seen if the situation deteriorates in the months to come. However, this could be a hard sell for some members, who fear an outbreak of inflation down the road. To this point, though, such pricing concerns seem a year or two away--if not more.