Fed’s ‘beige book’ reports modest to moderate economic growth

Regional economies throughout the country got a boost from manufacturing and the housing recovery this fall, but overall the nation’s economic growth was modest to moderate.

Manufacturing, which expanded in most regions of the country, was led by gains in motor vehicle and high-tech production, according to a survey released Wednesday by the Federal Reserve. The survey, the so-called beige book, covers the nation’s 12 regional Federal Reserve banks. The survey time period covered early October to mid-November.

Sales of new vehicles were reported as moderate to strong. American carmakers have been posting strong sales in recent quarters, partly because consumers are finally making big-ticket purchases, including replacing old cars they held on to during the recession.

The survey said that manufacturers in many districts reported optimism about near-term growth rates. Real estate was also a bright spot in the latest report. The housing recovery has been strong, with many regional Federal Reserve banks reporting “moderate to strong growth,” particularly in multiunit housing.

The pace, however, appears the be slowing. A Commerce Department report showed that in October the number of residential building permits issued rose to 1 million -- a rise of 6.2% over the previous month -- but the three-month average has slowed.

“This was a mixed report,” economists from IHS Global Insight wrote in a note on the Commerce Department’s report. “Despite strong October numbers, a three-month moving average of both single- and multifamily permits shows that construction is slowing.”

Hiring across the 12 regions was mixed, the survey said. That’s no surprise given the anemic rate of job growth across the U.S. over the last year. In the last three months, however, the pace of job growth has held steadier and has revived hopes that the economy is not sputtering at the end of the year, shaking off the effects of October’s partial government shutdown.

Payroll processor ADP said Wednesday that the private-sector labor market added 215,000 jobs in November. That figure beat economists’ expectations of 185,000 net new private-sector jobs.

In the west, the Federal Reserve Bank of San Francisco reported that demand for information technology security and cloud computing software were “notably strong.” The ongoing tech boom in the Bay Area is spurring high demand for commercial real estate in downtown San Francisco, the survey said, causing some to look for more affordable areas outside of the region.

The Pacific Northwest is poised for growth, the result of backlogged orders for commercial aircraft, the survey said. Boeing’s commercial aircraft subsidiary is based in Washington and is working on filling dozens of orders for its new 787 Dreamliner jet.

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