Fed's Beige Book Says Oil Price Curbs Spending

By Agence France-Presse The U.S. economy is expanding but the performance is patchy as roaring energy prices begin to stifle spending, the Federal Reserve's Beige Book survey showed Oct. 27. "Economic activity continued to expand in September and early October," said the report, drawn from the central bank's 12 districts and released eight times a year. Economic growth quickened in some districts, but it "moderated somewhat" in others such as New York and San Francisco. Hurricanes further hampered activity in Atlanta. "Many reports suggested that higher energy costs were constraining consumer and business spending," the central bank report said. Consumer spending was mixed. Many retailers complained warm weather had dampened demand for winter clothing. Hurricanes hampered shopping in the Atlanta region, where tourism also took "a substantial hit." But other areas noted a "modest improvement" in consumer expenditures, the bank said. Business investment and hiring of new workers also seemed to pick up modestly. Nearly half of the districts reported a rise in demand for temporary help, while reports of permanent hiring gathered pace and signs emerged of isolated shortages of workers. Wage pressures, nevertheless, "remained stable," according to most of the central bank's districts, although the Chicago district reported a gradual increase in pay and the re-emergence of hiring and retention bonuses. The government's estimate of economic growth in the third quarter is due Friday, with many analysts predicting the annual pace will accelerate to 4.3% from 3.3% in the second quarter. Copyright Agence France-Presse, 2004