The U.S. economic recovery
slowed in October and early November as business investment
weakened and production slumped, the Federal Reserve said.
Spending by companies “in all sectors continued to be
limited” and manufacturing “remained soft” throughout the
nation, the Fed said in its latest regional economic report card,
known as the beige book.
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“Economic activity grew slowly, on balance, in late October
and early November,” the Fed report said. Consumer spending
“varied” among the Fed’s 12 regional districts, while hiring and
wage pressures were “subdued” in most of the country.
The central bank’s policy making Open Market Committee
reduced interest rates by half a percentage point to 1.25 percent
on Nov. 6, the lowest since July 1961, in response to what it
called a “soft spot” officials began to detect in the economy in
the period described by the beige book.
Fed officials said in a statement after the rate cut that
“heightened geopolitical risks” were “inhibiting spending,
production and employment.” Policy makers meet again on Dec. 10
and will use the beige book and confidential reports on the
economy to decide the course of monetary policy.
The economy expanded at a 4 percent annual rate in the third
quarter, partially due to inventory increases. Economists expect
the fourth-quarter annual rate of expansion to slow to a 1.6
percent pace of growth.
Bloomberg News
