P.M. BRIEFING : Fed Gives Thumbs Up to U.S. Economy, Consumer Spending

The economy of the United States is expanding slowly, supported by a relatively healthy pace of consumer spending, the Federal Reserve said today in its report on current economic conditions.

The so-called Beige Book analysis, issued every six weeks, reported improvements in the nation’s industrial sector, but said construction is slowing in most regions, except near Chicago and along the Pacific Coast.

The analysis is used as a reference by Fed officials when they meet to discuss setting the nation’s interest rates.

“Most Federal Reserve districts describe economic activity as expanding slowly,” the central bank survey found. “Consumer spending varies from moderate to strong, except for auto sales, which have slowed after a January rebound. . . . However, dealers’ inventories are in better shape, with several (regions) reporting stocks to be at or below year-ago levels.”

Compiled by the Federal Reserve’s 12 district banks, the report also said agricultural conditions are “generally good” although some regions expressed “serious concern over the lack of soil moisture.”

December’s cold wave caused considerable crop damage in the South, and the report warned that produce prices could hit their highest levels since 1984. Citrus prices are expected to remain high throughout the year.