US economy growing at ‘modest’ pace in many regions: Federal Reserve

ECONOMIC activity in the United States continues to pick up steam, with “modest” growth seen in many parts of the country since late February, the Federal Reserve said on Wednesday.

“Overall economic activity expanded slightly, on balance,” the Fed said in its summary of US economic conditions known as the “beige book.”

Ten of the Fed’s 12 regional districts “experienced either slight or modest economic growth,” the report found - two more than was the case in the previous beige book.

“The economic outlook among contacts was cautiously optimistic, on balance,” the Fed report added.

The US economy has remained surprisingly resilient in the face of high interest rates.

The Fed has looked to constrain demand through tight monetary policy in a bid to bring inflation down to its long-term target of two per cent.

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After growing by 2.5 per cent last year, the Atlanta Fed’s GDPNow model estimates that US economic growth will continue at an annual rate of 2.9 per cent in the first quarter.

The US labour market, which has also held up surprisingly well in the face of high interest rates, “rose at a slight pace overall,” the Fed report found.

Prices in many regions saw “modest” increases, “at about the same pace as in the last report.” AFP