US Fed's Beige Book says economy seeing modest growth

Economic activity in the US has picked up pace since November, the Federal Reserve's latest Beige Book reports.

The survey of the 12 Federal Reserve Districts said there had been a modest rise in retail sales.

However, manufacturing remains sluggish and the districts said the "fiscal cliff" effect was stifling confidence.

Even so, car sales rose, and there was an improvement in the housing market, said the report, whose conclusions are used to set monetary policy.

The Beige Book said: "Reports from the 12 Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate."

Retail sales at Christmas were "modestly" higher from 2011 around the country, and car sales were steady or stronger in 10 of the Fed districts.

But the report warned that trends in unemployment and prices were "relatively unchanged" across its 12 districts.

The Fed has made clear that bringing down unemployment, and especially high long-term unemployment, is a priority.

The report noted that in the Chicago and New England districts companies were reluctant to increase staffing because of the finely-balanced "fiscal cliff" negotiations in Washington over tax and spending.

Meanwhile, the New York and Philadelphia districts "rebounded from the immediate impacts of Hurricane Sandy", the report said.

House sales were said to be "moderate or strong" in nine districts, as prices rose in all districts. New construction was reported higher in 11 of the 12 districts.

The 12 Fed districts regulate financial firms in the US states that are within their jurisdiction, collect and analyse economic data, and provide banking services. The information collected in this latest Beige Book will be used as the basis for the Fed's next policy discussion at its 29-30 January meeting.