By Dees Stribling, Contributing Editor<\/p>\n
On Wednesday, the Federal Reserve released the latest \u201cSummary of Commentary on Current Economic Conditions by Federal Reserve District,\u201d better known among economy wonks as the Beige Book, and it called U.S. economic growth \u201cmoderate.\u201d To be specific, even though the Fed is usually fairly vague, the report said that \u201creports from the 12 Federal Reserve Districts suggest overall economic activity expanded at a moderate pace during the reporting period from late February to early April.\u201d<\/p>\n
Manufacturing activity was up, according to the Fed, with particular strength in industries tied to residential construction and cars. At the same time, there was some weakness in defense-related sectors, which is probably fallout from the sequester. Consumer spending didn\u2019t grow that much during the reporting period, with high gas prices, the payroll tax rise and late winter snowstorms probably inhibiting spending.<\/p>\n
Home sales continued to rise in most districts, as did new home construction, but tight inventories are nevertheless driving residential prices up, the Fed reported, confirming commonly observed trends in those aspects of the U.S. housing market. The central bank also reported that commercial real estate activity improved in most districts.<\/p>\n
IMF Growth Forecast Edges Down<\/strong><\/p>\n This week, the International Monetary Fund forecast that global economic growth will end up at 3.3 percent in 2013 and 4 percent in 2014. That isn\u2019t much of an improvement over the 3.2 percent growth seen by the entire world in 2012, and it\u2019s 0.2 percentage points lower than the 2013 growth rate the organization predicted back in January.<\/p>\n Even though economic conditions in most parts of the world have improved in the last six months, the fund says the main reason behind this year\u2019s broadly unchanged growth prospects is that advanced economies haven\u2019t all benefited to the same extent from improved financial market conditions and confidence. \u201cFiscal brakes\u201d in some countries were another important factor \u2013 austerity policies in Europe and sequestration in the U.S., that is.<\/p>\n Still, the world\u2019s advanced economies successfully dodged a couple of bullets for now, namely the threat of a euro-zone breakup and a sharp fiscal contraction in the United States, perhaps associated with dysfunctional Congressional policies. Financial markets have rallied in response and financial stability has improved, according to the IMF.<\/p>\n