WASHINGTON (AP) — A Federal Reserve survey released Wednesday found that the U.S. economy held steady during the 16-day partial government shutdown, growing moderately in most regions from October through late November.
The Fed said seven of its 12 banking districts described growth as moderate. Four — Philadelphia, Chicago, Kansas City and San Francisco — said growth was modest. Boston said its regional economy continued to expand.
Manufacturing strengthened in most districts, helped by more production of cars, trucks and high-tech products. Consumers boosted spending in most regions, and retailers were hopeful yet cautious about the holiday shopping season. Hiring improved in five of the districts; the other seven reported little change.
The Beige Book survey, as it is known, is based on anecdotal reports from businesses and will be considered along with other data when the Fed meets next on Dec. 17-18.
Many economists believe the Fed will make no changes to its interest-rate policies at that meeting. They expect the Fed will continue to buy $85 billion a month in bonds, which are intended to keep long-term interest rates low and encourage more borrowing and spending.
But some analysts think the central bank could start to reduce those purchases in December, especially if Friday's report on November employment shows another strong month of hiring.
In June, Fed Chairman Ben Bernanke said the Fed could slow the purchases by the end of the year, if the economy and job market continued to improve. And minutes from the Fed's October meeting noted that members expect data will show gains in the job market and would "thus warrant trimming the pace of purchases in coming months."
Hiring has accelerated in recent months. The economy has added an average of 202,000 jobs a month from August through October, up from an average of 146,000 from May through June.
At the same time, growth has picked up. The economy expanded at a 2.8 percent annual rate in the July-September quarter. But analysts expect growth to slow in the current quarter to about a 2 percent rate.
The Beige Book report noted that businesses saw mostly temporary impacts from the 16-day government shutdown in October. Some companies in Cleveland and Chicago reported heighted levels of uncertainty due to continued debate over the federal budget. And tourist destinations in Boston, Richmond and Minneapolis reported lower traffic during that time.
In November, a measure of consumers' confidence fell to the lowest level in seven months, a drop that came after a much bigger decline in October that was blamed in part on the government shutdown.
The declines in both months were driven by falling expectations for hiring and the economy over the next six months.
Some economists also attributed the weakening confidence to Americans' frustrations and worries about the implementation of the Obama administration's health care reform.
Less optimism among Americans could slow the holiday shopping season and weigh on economic growth. Consumer spending drives 70 percent of economic activity.
But Americans are still making big purchases. November car sales rose 9 percent with sales running at an annual rate of 16.4 million, the best performance of the year, according to Autodata Corp.
Economists are hoping that steady hiring will boost confidence in the coming months. And lower gas prices could put more money in consumers' pockets in time for the holidays.