US economy grew at moderate pace through mid-Feb

The US economy continued to grow at a moderate pace through mid-February even after severe winter storms hit activity in some regions, the Federal Reserve reported yesterday.

According to the Fed, six of its 12 regions had reported moderate growth with other areas seeing moderate gains.

Despite a series of severe snowstorms, the Boston district said businesses in its area remained upbeat.

According to the Fed survey, consumer spending picked up in most districts, travel and tourism was increasing and manufacturing had shown solid gains with aerospace companies in the San Francisco region projecting a record year.

The information contained in the Fed report, known as the beige book, would be used at the central bank's next meeting on 17-18 March.

Economists say the Fed was not expected to start increasing interest rates until June or later.

Fed chair Janet Yellen delivered the central bank's semiannual economic report to Congress last week and indicated the Fed was still willing to be ''patient'' when it came to increasing interest rates due to weak wage growth and inflation well below the Fed's 2 per cent target.

As per the beige book, moderate wage pressures prevailed, limited largely to workers in skilled occupations.

The central bank's survey of business conditions also pointed to plunging oil prices since June hurting energy firms.

The report, published by the Fed eight times a year, looks at the current condition of the US economy within the central bank's 12 districts, covering a range of economic activity from manufacturing to construction to wage growth and offers economists an opportunity to identify signs the US economy was growing faster or slower than forecast.

The Kansas City district had seen declining sales since the previous survey and the Minneapolis district reported some apparel stores had difficulty selling winter clothing due to a relatively mild December and January.

The Boston and Cleveland districts however reported increased sales of winter items, such as apparel, rock salt and snow shovels.

A separate report Monday showed consumer spending declined in January with a drop in gasoline prices across US continuing to weigh on inflation.

Consumer spending, accounting for around two-thirds of US economic activity, fell 0.2 per cent in January after falling 0.3 per cent in December, the commerce department said Monday.