The weak U.S. economy is improving modestly with little upward pressure on wages and finished goods despite commodity price gains, the Federal Reserve said on Wednesday in a report that gives it little reason to move from its current ultra-low interest rates.
Eight of the Fed’s 12 districts reported some pickup in economic activity since an October 21 report. The remaining four — Philadelphia, Cleveland, Richmond or Atlanta — reported conditions little changed or mixed, the Fed said in its Beige Book anecdotal report on economic conditions.
Commercial real estate and construction ran counter to the trend of moderate pickup, however. Business contacts told the Fed those areas are very weak and in many cases deteriorating. Battered jobs markets remained weak but were stabilizing and showing scattered signs of improvement, the Fed said.
The report pointed to little reason to worry about inflation. Some districts reported upward pressure on commodity prices, but little or no indication of upward pressure on wages or any “significant” upward pressure on finished goods prices.