How will Kerry spin this?
Fed Reports Economic Growth Is Continuing
Wednesday October 27, 2:02 pm ET
By Martin Crutsinger, AP Economics Writer
Fed Reports U.S. Economic Growth Is Continuing in Spite of Rising Energy Costs
WASHINGTON (AP) -- The U.S. economy continued to grow in September and early October despite being buffeted by rising energy costs and increased uncertainty caused by the presidential campaign, the Federal Reserve said Wednesday, in its last snapshot of business conditions before Election Day.
The survey of business activity around the country, compiled from reports submitted by the Fed's 12 regional banks, depicted an economy that was moving ahead with even the hard-hit manufacturing sector beginning to regain its footing after a prolonged period of weakness.
"Economic activity continued to expand in September and early October," the Fed said in the new survey, which found that the pace of activity had quickened in the Richmond and Dallas districts. Five other districts -- Boston, Philadelphia, Chicago, Minneapolis and Kansas City -- were reporting steady expansions were under way.
The Fed's report will be used by central bank policy-makers when they next meet on Nov. 10 to decide whether to raise interest rates further.
Many economists believe that the central bank will push up rates for a fourth time this year in an effort to make sure that a rebounding economy does not generate unwanted inflationary pressures.
But some analysts believe the Fed could decide to pause in its credit tightening out of concerns that rising energy prices, which climbed to record highs above $50 per barrel for crude oil, could threaten to derail the economic recovery.
While noting that higher energy costs did seem to be constraining consumer and business demand in some areas, the Fed survey did not signal any worries that this year's price spike could bring on a recession, as did the oil shocks of the 1970s and early 1980s. The Fed noted that some districts were reporting increased uncertainty stemming from the presidential campaign.
In other economic news, the Commerce Department reported Wednesday that orders for big-ticket manufacturing goods edged up a modest 0.2 percent in September while sales of new homes were up a bigger-than-expected 3.5 percent to the third highest monthly level on record. |
