U.S. economic activities in most surveyed districts continued to expand between mid-November and late December, but some oil producing regions saw signs of slowdown due to lower oil prices, a survey by the Federal Reserve showed Wednesday.
In the Fed's latest Beige Book which gauges the economy of its 12 districts, most districts reported a "modest" or "moderate" pace of growth, but Kansas City District reported only slight growth in December. Nonetheless, most districts expect faster growth over the coming months.
Consumer spending increased in most districts, and the retail sales generally recorded modest year-over-year gains; employment in a variety of sectors expanded moderately during the reporting period; manufacturing activity continued expanding in most districts, residential real estate sales and construction were largely flat on balance across districts; and significant wage pressures continued to be limited largely to workers with particular technical skills, said the Beige Book.
Although the low oil prices will give boost to consumption, it has started to affect some oil-producing regions. The Kansas City and Dallas Districts reported that demand for oilfield services decreased. Oil drilling activity in the Kansas City District declined, and the energy sector in the district is expected to slow further in response to lower energy prices.
The Fed releases the Beige Book eight times a year to provide a snapshot of the local economy and updates it two weeks before each of its monetary policy meeting. The Fed's policymakers will meet on Jan. 27 to 28./.