Fed’s Beige Book says economy improved in 10 of 12 districts

Bloomberg News

The U.S. economy improved in 10 of the Federal Reserve’s 12 districts last month, marking a broadening of the recovery, the central bank said today.

“While economic activity remains at a low level, conditions have improved modestly further,” the Fed said today in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. The Philadelphia and Richmond Fed districts reported “mixed conditions.”

The beige book offers anecdotal evidence that will help central bankers weigh developments in an economy where unemployment is projected to remain above 10 percent through the first half of the year. Policy makers, who next meet Jan. 26-27, last month repeated a pledge to keep borrowing costs “exceptionally low” for an “extended period.”

Most district banks reported that holiday-season consumer spending was “slightly greater” in 2009 than the year before, while remaining “far below” levels of 2007, according to the report, which reflects information collected through Jan. 4. Manufacturing improved or held steady in most districts, while the labor market and loan demand remained weak.