U.S. Economy Remains on Its Expansion Path
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The U.S. economy continued to grow in the early fall despite being buffeted by rising energy costs and hurricanes, the Federal Reserve said Wednesday, providing 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 despite the string of hurricanes that hit Florida and other Southern states and a surge in crude oil prices.
“Economic activity continued to expand in September and early October,” the Fed said in the new survey.
Although growth remained strong in the West, Fed officials in San Francisco found growth “appears to have slowed slightly” from earlier in the year.
The Fed’s report will be used by central bank policymakers when they meet Nov. 10 to decide whether to raise interest rates.
Many economists believe that the central bank will push up rates for a fourth time this year in an effort to make sure a rebounding economy does not generate unwanted inflationary pressures. They said there was nothing in the new Fed report to shake that view.
“The Fed is saying the economy should grow at a decent pace even if there are some potholes along the way,” said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis.
In other economic news Wednesday, the Commerce Department reported that orders for big-ticket manufacturing goods rose a modest 0.2% in September. The gain was only the third increase in the last six months. Orders rose 1.9% in July and 1.3% in June after a 0.6% drop in August and even bigger declines in May and April.
Sales of new homes were up a bigger-than-expected 3.5% to an annual rate of 1.21 million units.
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