U.S. economic activity continued to expand from mid-May through June, with lower energy prices helping to boost consumer spending but remaining a drag on manufacturing, the Federal Reserve said on Wednesday.
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In its Beige Book report of anecdotal information on business activity collected from contacts nationwide, the U.S. central bank said most of its regional Fed banks described growth as either progressing at a "moderate" or "modest" pace.
It said manufacturing activity was uneven across the country, with lower oil prices hurting the oil and gas industry, and a strong dollar dampening exports.
"Reports continued to reflect decreases in oil and natural gas drilling activity in Cleveland, Minneapolis, Kansas City, and Dallas," the Fed said. "Reports of capital spending declines continued in Cleveland, Atlanta, and Dallas, resulting in some labor cutbacks in Atlanta and Dallas."
It said heavy machinery manufacturers in Chicago noted weak demand from the oil and gas industry for mining equipment, while accounting firms in Dallas reported growing activity in mergers and acquisitions among oil- and gas-related firms.
The report, compiled by the Atlanta Federal Reserve Bank with information collected before July 3, also noted that employment had increased or held steady in most sectors, though there were some reports of layoffs in manufacturing and energy industries.
"Most districts cited only modest wage pressures aside from positions that required specialized skills or were in high-demand. Prices for inputs and finished goods remained steady since the previous report," the Fed said. (Reporting By Lucia Mutikani; Editing by Andrea Ricci)