The so-called Beige Book report from the U.S. Federal Reserve Banks was released on Wednesday, indicating that U.S. economic growth is slowing, but still positive, economists note.

RBC Economics says that the latest Beige Book report characterizes U.S. economic activity “as continuing to grow but with ‘widespread signs of deceleration,’.” It notes that five districts reported economic growth at a modest pace, two observed positive growth, and the other five districts had more mixed results, with indications of deceleration in overall economic activity.

Of the various areas the report touches on, RBC notes that it found consumer spending rose, but continues to be focused on necessities; and manufacturing activity expanded, albeit at a slower rate. Real estate and construction remains a source of weakness. It also reports that lending remains subdued, and employment hasn’t improved much.

“Today’s Beige Book report provides anecdotal evidence of further easing in the pace of growth, with this ‘deceleration’ of the economy suggesting minimal progress in terms of reducing a still high unemployment rate,” RBC says.

TD Economics says that the report’s qualitative assessment of the economy “is consistent with the signals emanating from harder data releases, and confirms that while the pace of recovery has slowed it remains intact.”

“There remain promising signs that conditions in key areas of the economy are improving – gradually,” TD adds. “Credit supply and demand were broadly unchanged, but this reflects a stabilizing in conditions. Manufacturing activity is still expanding, continuing to act as a source of growth. Consumer spending continues to grow, at a tepid pace. We believe that these trends will continue into the future and provide the backdrop for sustained positive, albeit below trend, economic growth.”

RBC concludes that, “With inflationary pressures continuing to be held at bay, the Fed will remain focuses on stimulating growth. Our forecast does not call for the Fed funds to rise until well into next year.”

IE