Federal Reserve's 'beige book' confirms improving U.S. economy

Reporting from Washington—The Federal Reserve's latest report on the nation's regional economies showed that the pace of activity around the country is picking up, with the notable exception of the housing market.

The Fed report, dubbed the beige book, confirmed that consumer spending was strong at the end of last year, with most parts of the country indicating significant gains in holiday sales.

The central bank's New York district described the retail activity as "brisk," and Dallas called it "robust." Travel and tourism also performed solidly in most areas at year's end, according to a summary of economic conditions made by the Fed's 12 bank districts and released Wednesday.

Manufacturing continued its "steady overall expansion," the report said.

Heavy-equipment production and steel led the pack as demand got a good lift from resurgent activity in energy, farming and auto manufacturing. There also was strong demand for computers and electronic parts, a boon notably for the Kansas City, Dallas and San Francisco districts.

The service-producing part of the economy strengthened as well.

Professional services, technology and healthcare providers grew in different parts of the country. "Lending activity edged up overall," the report said, as companies sought more loans.

Although some districts reported gains in home sales from a year earlier, as well as a pickup in apartment construction, on the whole residential real estate markets remained at "very low levels" throughout the U.S.

The beige book described the San Francisco district, which includes California and eight other Western states, as growing at a "moderate pace" from late November to the end of the year, the period covered by the report.

It noted that in the San Francisco district, as well as elsewhere, high unemployment rates and limited hiring held wage gains to modest levels, while healthcare costs for workers rose.

But the report noted significant pay increases for workers with specialized skills in certain manufacturing and technology sectors.

The Fed's report comes on the heels of solid job gains reported for December and other data suggesting that the economy entered the year with increasing momentum.

The beige book is an anecdotal snapshot of the economy based on reports from the district banks and interviews with key businesses, economists and market experts. The book is issued eight times a year.