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Beige Book: Modest or moderate growth for all US districts
WASHINGTON (1/17/13)--Economic activity has expanded in all 12 U.S. financial districts at either a modest or moderate growth pace, according to the Federal Reserve's Beige Book released Wednesday.

All 12 districts reported some growth in consumer spending, with inflation mostly unchanged.

Trends in wages, prices, and employment conditions stayed relatively unchanged in all districts. Input price pressures were reported to be steady overall, with mixed reports for specific commodity prices in several districts. Employment conditions also were little changed since the last report.

However, hiring plans were more cautious for firms doing business in Europe or in the defense sector. Wage pressures were stable in all 12 districts, though several districts cited greater pressures for firms that reported difficulties finding qualified workers with specific skills.

Manufacturing activity was mixed, with six districts growing since the last Beige Book, three contracting, and two reporting little or no change.

Existing residential real estate activity expanded in all reporting districts. Growth rates were described as moderate or strong in nine districts. The Boston District attributed its strong sales growth to low interest rates, affordable prices and rising rents. All districts reporting on price levels saw increases, with New York and Chicago reporting only very minor increases. Five districts reported housing inventories are falling.

New residential construction--including repairs--expanded in all but one district reporting. The Kansas City District reported that increased lumber and drywall costs limited construction, causing a slight decline this period. Hurricane Sandy disrupted construction activity initially in New York, but that has since led to increased work for subcontractors on repairs and reconstruction.

Labor market conditions remained mostly unchanged in all districts. The Boston, Richmond, Atlanta, Chicago, Kansas City and San Francisco districts reported delayed hiring, often in defense manufacturing, due to fiscal cliff uncertainties.

Companies in the Chicago District with trade or investment exposures to Europe reduced their hiring plans. Manufacturers there choose to cut hours instead of reducing work forces in expectation of production rebounds in 2013. Atlanta and Kansas City cited health-care policy changes and costs as another cause for minimal hiring. The New York, Atlanta, Minneapolis and Dallas districts saw the labor market firming modestly. Several districts reported difficulties finding qualified workers in some fields.
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