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Within the past hour, the U.S. Federal Reserve has issued its Beige Book summation of economic activity across the country. This document is used by the nation's central bank to effect monetary policy decisions at its regular Federal Open Market Committee (FOMC) meetings. The next such confab is scheduled to take place on January 29th and 30th.

In the aggregate, this compilation of reports from the 12 Federal Reserve Districts indicated that economic activity across the country had expanded since the last Beige Book report, which was issued November 28th. In sum, all 12 of the Districts said that economic growth was proceeding at either a modest or a moderate pace.

Moreover, since the last Beige Book, activity in the New York and Philadelphia Districts has rebounded from the tragic dislocations caused by Hurricane Sandy in late October and early November. Growth in the Boston, Richmond, and Atlanta Districts has also stepped up somewhat, with just the St. Louis District seeing some slowing in growth, but not a contraction. 

In addition, all 12 of the Districts reported at least some growth in consumer spending, which is critical, as such spending accounts for the majority of aggregate U.S. business activity, or the nation's gross domestic product. Overall, holiday sales were modestly higher in 2012 than in 2011, although for many of the Districts, the gains were below expectations.

At the same time, the long and contentious fight over the budget, and the constant threat of going over the proverbial fiscal cliff, has taken a toll on consumer spending. Now, as we go forward to the hoped-for resolution of the needed debt-ceiling extension, there could be further fighting, and additional pressure coming to bear on the economy.

In addition to the consumer spending gains, we also are seeing better levels of activity in the real estate arena. Agriculture remains mixed, in the meantime, while trends in wages, prices, and employment were relatively unchanged since the late-November Beige Book. Further, reports had auto sales strengthening in 10 of the 12 Districts, while tourism was holding steady in all but one of the eight reporting Districts. Finally, manufacturing was mixed, with just six of the Districts reporting gains since the last report and with three Districts actually contracting along this front.

All in all, this was a decent report, but one that is unlikely to change many minds at the Federal Reserve as that body gets set for its next FOMC meeting and interest-rate decision later this month.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.