WASHINGTON (AP) - While U.S. housing and auto sales showed strength over the summer, manufacturers were feeling pressure from China's economic slowdown and the oil industry was squeezed by lower energy prices.
WASHINGTON (AP) — While U.S. housing and auto sales showed strength over the summer, manufacturers were feeling pressure from China's economic slowdown and the oil industry was squeezed by lower energy prices.
That's the U.S. economic picture that emerges from the Federal Reserve's latest look at business conditions around the country. The Fed said 11 of its 12 regional banks reported that the economy grew at least modestly in July through mid-August. One of the Fed's regions — Cleveland — reported only slight growth.
The Fed report, known as the beige book, will be used for discussion when the central bank meets next on Sept. 16-17. The gathering will be closely watched because of the possibility it will decide to start raising interest rates from record lows near zero.
The recent stock market turbulence, triggered by worries about China's slowdown, has led some analysts to lower the odds for a Fed move in September. But other economists still believe a Fed rate hike this month is likely, especially if markets stabilize and Friday's unemployment report shows strong job gains continued in August.
The Beige Book survey showed a somewhat mixed picture for manufacturing, with 10 regions reporting stable or positive growth overall but New York and Kansas City seeing declines.
The Boston, Philadelphia, Cleveland, Richmond and Dallas districts all said that a strong dollar had dampened manufacturing activity. Three districts cited China's deceleration as dragging on some business.
The Chinese slowdown hurt demand for wood products in the San Francisco district, chemicals in the Boston area and high-tech goods in the Dallas region.
The survey found that real estate activity improved throughout the country, with home sales and home prices climbing in all 12 districts. Auto sales were also a bright spot in most regions.
"Expectations are generally optimistic that auto sales will improve or continue to be strong through the end of the year," the report said.
Wages were reported to be "relatively stable" in most regions, although several districts noted wages heading higher in some industries. St. Louis said that almost three-fourths of the businesses surveyed reported rising wages in the last three months, while Cleveland reported intensifying wage pressure in construction, retail and transportation sectors. Kansas City and Dallas, both regions hit by layoffs in the oil industry, reported wage growth had either slowed or was flat.
The overall economy expanded at a healthy annual rate of 3.7 percent in the April-June quarter. Most forecasters believe growth has moderated slightly to around 2.5 percent in the current July-September quarter but are looking for an acceleration to around 3 percent growth in the final three months of the year.