The U.S. economy is continuing to grow at a “modest to moderate” pace, the Federal Reserve reported Wednesday (July 17), in an assessment that is likely to keep it continuing its loose monetary policy.
MarketWatch reported that the so-called Beige Book found expanding manufacturing, rising consumer spending, stable to growing services activity, and moderate to strong residential real estate and construction.
The Beige Book is a collection of anecdotes on the economy used to help the Federal Reserve prepare for its next interest rate setting meeting. The Fed has pledged to keep interest rates at near-zero levels at least until unemployment drops below 6.5%, as the central bank debates whether to scale back its $85 billion per month bond purchase plan.
Earlier, Federal Reserve Chairman Ben Bernanke said there was no preset path for asset purchases.
The Beige Book noted that while hiring held steady or increased at a measured pace, there was reluctance to add full-time workers. Some analysts suggested that the health-care law commonly called Obamacare is the force behind employer reluctance to add full-time workers.
The hard data seem to confirm the assessment of the Beige Book. Industrial output grew at an annualized 0.6% pace in the second quarter, and retail sales growth in June was muted. House prices, however, have seen strong growth.
Economists polled by MarketWatch expect growth of just 1.1% in the second quarter.