Page 7 - atoday
P. 7

U.S. NEWS A7
                                                                                                                                    Thursday 15 October 2015

US Financial Front:

Fed says consumer spending, auto sales boost US growth 

C. S. RUGABER                  A shopper checks out at a Wal-Mart Neighborhood Market store in Bentonville, Ark. The Federal                                   beige book said. The Bos-
AP Economics Writer            Reserve on Wednesday, Oct. 14, 2015 said steady consumer spending and an improving                                              ton Fed said that adver-
WASHINGTON (AP) —              housing market spurred modest U.S. economic growth in the late summer, though factory output                                    tising and consulting firms
The Federal Reserve says       was sluggish in part because of the strong dollar.                                                                              were planning to add
steady consumer spend-                                                                                                                                         jobs, while manufacturers
ing and an improving                                                                                                                (AP Photo/Danny Johnston)  were laying off workers.
housing market spurred                                                                                                                                         Yet even as job gains were
modest U.S. economic           most analysts expect that      boosted their spending,        in the Richmond, Atlanta,                                         steady, wage growth “re-
growth in the late sum-                                       likely because of solid hir-   Chicago and Dallas dis-                                           mained subdued” in most
mer, though factory out-       if an increase does occur      ing in the past year that      tricts.                                                           regions, the Fed’s report
put was sluggish in part                                      has put 2.8 million people     Hiring rose at a modest to                                        said. Eight districts said
because of the strong dol-     this year, it will happen in   to work. Auto sales were       moderate pace in nine of                                          that only slight to modest
lar.                                                          even stronger, particularly    the 12 bank districts, the                                        pay gains occurred from
The Fed said Wednesday         December rather than this                                                                                                       mid-August through early
in its latest snapshot of the                                                                                                                                  October.
economy that nine of its       month.                                                                                                                          Steep drops in oil and gas
12 regional banks report-                                                                                                                                      prices in the past year
ed that growth was mod-        Americans  generally                                                                                                            continued to weigh on
erate or modest from mid-                                                                                                                                      many energy producers,
August through the be-                                                                                                                                         which are still cutting jobs
ginning of October. Two                                                                                                                                        in Texas, the Dallas Fed
banks said economic ac-                                                                                                                                        said. Oil and gas drillers
tivity increased while the                                                                                                                                     are also ordering less steel
Kansas City Fed said the                                                                                                                                       pipe and other equip-
economy slowed slightly.                                                                                                                                       ment, dragging down
The Fed’s report echoes                                                                                                                                        factory output, according
other recent data that                                                                                                                                         to many districts.
suggests the U.S. econo-                                                                                                                                       Manufacturers are also
my, while still expanding,                                                                                                                                     struggling because of the
has run into headwinds                                                                                                                                         strong dollar, which has in-
from overseas and lost                                                                                                                                         creased about 13 percent
some momentum. Most                                                                                                                                            in value against a basket
analysts forecast that                                                                                                                                         of other currencies in the
growth will fall sharply in                                                                                                                                    past 12 months.q
the July-September quar-
ter to an annual pace of       US producer prices fell in September on cheap gas 
about 1.5 percent from
3.9 percent in April-June.     JOSH BOAK                      prices tumbled 0.3 percent     0.8 percent.                                                      rate hike at their Oct. 27-
The report, known as the       AP Economics Writer            in September.                  Consumer prices, mean-                                            28 meeting. Many analysts
beige book, will be used       WASHINGTON (AP) — Prices       All of this suggests that the  while, have barely risen. Ac-                                     had anticipated that the
by Fed policymakers as         fell for manufacturers, farm-  Federal Reserve may delay      cording to the Federal Re-                                        Fed would increase short-
a basis for discussing the     ers and other producers in     on an expected rate hike       serve’s preferred measure,                                        term interest rates at its Sep-
economy’s health when          September, as lower energy     until signs of inflation ap-   they increased just 0.3 per-                                      tember meeting for the first
they meet next on Oct. 27-     costs have limited broader     pear. “The economy is stuck    cent in August from a year                                        time in nine years. But the
28. The beige book is re-      inflation.                     and deflation pressures are    earlier. Excluding the vola-                                      U.S. central bank held off
leased eight times a year      The Labor Department said      the key risk,” said Steven     tile categories of food and                                       amid concerns about Chi-
and consists of anecdotal      Wednesday that the pro-        Ricchiuto, chief economist     energy, core prices have                                          na’s economy growing at a
reports from  businesses  in   ducer price index, which       at Mizuho Securities.          risen a gentle 1.3 percent                                        slower pace and sharp vol-
each of the 12 districts.      measures price changes         Wholesale prices have de-      in the 12 months ending in                                        atility in the U.S. stock mar-
Fed Chair Janet Yellen         before they reach the con-     creased 1.1 percent from a     August.                                                           ket. The Fed has said that it
has said the Fed may raise     sumer, dropped 0.5 percent     year ago, with September       Those inflation figures are                                       needs to feel “reasonably
short-term interest rates      last month after being un-     marking the eighth straight    far from the Fed’s 2 per-                                         confident” that inflation will
before the end of the          changed in August. Exclud-     12-month decline. Gasoline     cent inflation target, a gap                                      move back to its 2 percent
year should the economy        ing the volatile food and      costs fell a sharp 16.6 per-   that could cause Fed poli-                                        target before beginning to
continue to expand. Yet        energy categories, core        cent, while food prices slid   cymakers to postpone a                                            raise interest rates.q
   2   3   4   5   6   7   8   9   10   11   12