The U.S. Federal Reserve Board continued to offer a fairly gloomy view of the U.S. recovery in its latest report released Wednesday.
The Fed released its so called Beige Book, in preparation for the November 1-2 meeting of the Federal Open Market Committee, and RBC Economics reports that it continues to describe “a very subdued economic environment with the pace of growth characterized in many districts as modest or slight.”
While there were some signs of life in certain sectors, such as manufacturing and transportation, RBC says that these are offset by downgrades elsewhere, such as the outlook for business conditions. And labour markets were little changed.
“In a familiar pattern during this recovery, it seems that for every two steps forward (i.e. stronger auto sales and manufacturing production) there is at least one-step back (i.e. weaker lending activity),” says TD Economics.
TD says that the report describes an economy that is growing slowly, but not on the verge of recession. “When the Fed convenes on November 1-2, the domestic economic backdrop will have improved a little from September’s meeting. However, with crisis looming in Europe, inflation expectations under wraps, and no meaningful traction in the job market, the Fed’s focus will remain on strengthening the economic recovery,” it concludes.
RBC notes that the report continues to portray “a relatively somber picture of the U.S. economy”; adding, “In this environment, the Fed is expected to be in little rush to start withdrawing stimulus from the system with fed funds expected to remain highly accommodative until 2013.”