By Liz Moyer
Investing.com -- The Federal Reserve in its periodic beige book on Wednesday said economic activity hasn't changed much since its last report in November, with its contacts expecting little growth in the months ahead.
The report also sees price growth moderating further this year.
The report, which is a compilation of observations from each of the Fed’s 12 regional districts, said consumer spending increased slightly, “with some retailers reporting more robust sales over the holidays.” But other retailers said high inflation continued to cut into household purchasing power, particularly among low- and moderate-income consumers.
Data from the National Retail Federation supported that latter claim. Holiday sales in November and December were up 5.3% from the prior year, but that was lower than the trade group had earlier projected.
The Fed said auto sales were flat on average, while tourism got a boost from strong travel demand. Manufacturers indicated that activity declined modestly on average, the Fed said, as supply chain issues eased.
In housing, sales and construction continued to decline across the various Fed districts, and residential mortgage demand remained weak.
Employment continued to grow at a modest to moderate pace, the beige book said, though firms continued to see difficulty filling open positions. “Many firms hesitated to lay off employees even as demand for their goods and services slowed and planned to reduce headcount through attrition if needed,” the book said.
The report, which is published eight times a year, came on the same day software giant Microsoft Corporation (NASDAQ:MSFT) announced it would cut 10,000 jobs by the end of March and take a $1.2 billion severance charge as it tries to rein in costs.