U.S. growth weakened slightly, Fed says
WASHINGTON — The economy grew at a moderate or modest pace this summer in eight of the Federal Reserve’s 12 U.S. districts, a slowdown from previous reports that may make Fed policymakers more cautious about an interest rate hike.
The Fed’s “Beige Book” survey of business conditions, released Wednesday, found that growth weakened in two districts — Philadelphia and Richmond. The economy was unchanged in New York and Kansas City. However, retail sales declined in the Dallas district, which includes Houston.
The report comes after Friday’s jobs figures showed that hiring slowed in August to half the pace seen in June and July. And a business survey found that manufacturing activity actually shrank last month. Such readings may darken the outlook for many Fed officials.
Consumer spending and retail sales were mostly flat across the 12 districts, the Beige Book said, a potential concern since robust consumer spending has been one of the few factors lifting the economy this year. Auto sales declined from a high level, while home sales have increased, the report said.
The Beige Book, which is based on discussions with business leaders in each regional district, will be considered at the Fed’s next meeting Sept. 20-21. Fed policymakers will weigh whether to raise the short-term interest rate that it controls for the first time this year.
Separately Wednesday, the Labor Department said job openings jumped 4 percent in July. Another government report last Friday showed that employers pulled back on hiring in August.
“The jobs report from last Friday still kind of overshadowed that,” said JJ Kinahan, chief strategist at TD Ameritrade.
On Wall Street Wednesday, the Nasdaq composite eked out a gain, pushing the tech-heavy index to its second record-high close in a row. The Dow Jones industrial average and Standard & Poor’s 500 index closed slightly in the red.