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FED BEIGE BOOK CONFIRMS US EXPANSION

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US economy expanding

FED BEIGE BOOK CONFIRMS US EXPANSION

Dec 4 2014, 10.27am GMT

STOCK.com

The FED released its report on business activity through the ‘Beige Book’ yesterday to confirm economic expansion.

Consumer spending increased in the third quarter of 2014, being boosted by lower oil prices. This has added to the positive economic outlook for the States as the Fed reports, "Some contacts viewed lower gasoline prices as a contributing factor to higher consumer spending, and an early cold spell helped spur sales of winter apparel in several districts."

Shale drilling was also up even with the sharp drop in oil prices, and oil production in North Dakota is actually expected to increase over the next 2 years. However in Texas, even though demand for oil services continued to grow, the FED said that, “Outlooks for next year were less optimistic than in the prior report, and contacts said that budgets were being revised and capital expenditures are expected to decline in response to lower oil prices.”

The Beige Book is published eight times per year with anecdotal information on current economic conditions from each Federal Reserve Bank District and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector.

An expanding economic outlook was the main message of the latest Fed Beige Book, a sentiment that will feed into the meeting on 16 December when central bankers discuss monetary policy.

Other data taken into consideration this week is the non-farm payrolls figure, which predicts a growth of 230,000 for November and average hourly wages predicted to rise only 0.2%.

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