The US economy continued growing in October and November amid widespread optimism that the world's biggest engine would stay on track, according to a Federal Reserve report released Wednesday.
For the first time in more than a year, the Fed dropped its "modest" and moderate" descriptions of overall growth, saying simply that reports suggest "that national economic activity continued to expand" in the last two months.
The Fed's Beige Book, a collection of anecdotal information on current economic conditions, said that "a number" of the central bank's 12 districts reported contacts "remained optimistic about the outlook for future economic activity."
For the first time in more than a year, the Fed dropped its "modest" and moderate" descriptions of overall growth, saying simply that reports suggest "that national economic activity continued to expand" in the last two months.
The details of the report were encouraging, with contacts in 11 of the districts described as "optimistic" about their sector and the economy's direction in general.
Notably absent from the upbeat category was the huge San Francisco Fed district, which includes California and eight other western states, where the economy was said to be "improving moderately."
The Beige Book report said that employment gains, the primary object of the Fed's easy-money policy, were "widespread" while overall price and wage inflation remained "subdued."
Consumer spending, which accounts for about two-thirds of US output, "continued to advance" in most districts, said the report. Some contacts said lower gasoline prices, the result of an oil market slump, had helped to boost spending.
Vehicle sales were particularly strong in the Atlanta, Chicago, Richmond and San Francisco districts, while cheaper gasoline spurred sales of sport utility vehicles and trucks in the Chicago, Cleveland and Philadelphia districts.
The latest Beige Book covers information collected on or before Nov 24. It will inform discussions at the Federal Open Market Committee's last monetary policy meeting of the year, on Dec 16 and 17.
After the FOMC meeting, the Fed will update projections on growth, unemployment, inflation, and the likely timing of the first increase in the federal funds rate in more than six years, currently seen as mid-2015.
A recent spate of mostly positive US economic data has fed some speculation the Fed may choose to move up the timing of the rate hike, although most Fed officials have expressed caution about a too-sudden move that could nip the economy's momentum.
The Fed in October wound down its asset-purchase programme, or quantitative easing, after pumping trillions of dollars into the economy in the past six years to shore up the recovery from the Great Recession.
"Descriptions of economic activity were notably more upbeat in the November Beige Book relative to recent reports," Barclays analyst Jesse Hurwitz said in a research note.
"We see the broad-based economic gains reported from the regional Federal Reserve banks through November as consistent with recent language changes to FOMC statements, and view this report as on track with our outlook for an initial rate hike in June of next year."
According to the report, improvement was seen in demand for nonfinancial services, business spending, manufacturing, and construction and real estate activity.
Agriculture showed overall good crop yields, but most crop prices were lower than a year ago.
Meanwhile, the report added, "Retailers in many districts were optimistic about the upcoming holiday season."