US growth at 'moderate' pace: Fed Beige Book

The Federal Reserve slightly upgraded its view of the US economy Wednesday, its Beige Book report on regional activity saying that manufacturing and construction continues to grow.

"Reports from the twelve Federal Reserve Districts suggest overall economic activity expanded at a moderate pace during the reporting period from late February to early April," the report said.

The previous Beige Book, a key input for monetary policy-making, was more tentative, calling growth "modest to moderate" amid concerns of a nascent slowdown due to higher payroll taxes and a cut in government spending.

"Most districts noted increases in manufacturing activity since the previous report. Particular strength was seen in industries tied to residential construction and automobiles," the report said.

However, in a suggestion that the steep federal government "sequester" spending reductions were having an impact, it said that several districts reported "uncertainty or weakness in defense-related sectors."

Consumer spending was up only "modestly," with some evidence that the payroll tax rise, higher gasoline prices and winter weather was to blame.

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