US economy grew in April-May after Q1 stall: Federal Reserve's Beige Book

[WASHINGTON] The US economy returned to modest-to-moderate growth during April and May after stalling in the first quarter of the year, the Federal Reserve's Beige Book survey said Wednesday.

Respondents to the regional survey, which helps shape Fed policy decisions, "were generally optimistic" in their outlook, expecting growth to continue or pick up.

Most of the Fed's 12 districts saw gains in consumer spending, including on cars and homes, Construction, travel and tourism strengthened in most areas.

Some of that was attributed to the boost to household incomes from lower gasoline prices after the oil price crash.

But cheap oil took a toll on the centres of the oil industry, where drillers and service companies have been laying off thousands.

That contributed to overall slower economic growth in the Fed's Dallas district, and also held back activity in the Kansas City district just to the north.

The survey, which covered roughly six weeks to late May, showed the economy coming back after it contracted 0.7 per cent in the first three months of the year, due to a combination of the effects of harsh winter weather in some areas and the grinding port slowdown on the west coast.

But the Beige Book survey suggests the rebound was not as strong as hoped. The huge Atlanta Fed district, covering much of the southeast, saw few gains.

Manufacturing activity was at best slightly faster across the country; jobs and wage gains were also only "slight" overall.

AFP