According to Yahoo News, U.S. economic activity experienced a slowdown from late October through mid-November, while businesses reported largely moderating inflation and easier hiring for jobs, according to the Federal Reserve's report on Wednesday. This highlights the waning economic momentum towards the end of the year.
The U.S. central bank released its latest assessment of the economy's state a day after Fed Governor Christopher Waller, a key voice on its policy-setting committee, indicated that the current progress on lowering inflation means the possibility of a reduction in the Fed's benchmark overnight lending rate next year is becoming more likely.
"Economic activity slowed since the previous report, with four Districts reporting modest growth, two indicating conditions were flat to slightly down, and six noting slight declines in activity," the Fed stated in its survey, known as the "Beige Book," which polled business contacts across the central bank's 12 districts through November 17. "The economic outlook for the next six to twelve months diminished over the reporting period."
The Fed maintained its policy rate unchanged in the 5.25%-5.50% range earlier this month for the second consecutive meeting after increasing borrowing costs by more than 5 percentage points over the past 20 months to combat high inflation. The Fed aims to weaken the economy just enough to bring inflation down without causing a recession.
The four Fed districts reporting growth were Dallas, Richmond, Atlanta, and Chicago. Most districts reported a decline in growth, with the Kansas City Fed noting consumers increasingly likely to "share a roof and share meals" to manage household budgets, and contacts in the San Francisco Fed district expressing concern over a weaker economic outlook and increased overall uncertainty.
Investors anticipate Fed policymakers to maintain their stance at the December 12-13 policy meeting, given the progress made in returning inflation to the central bank's 2% target rate and the fact that it will take more time for the full impact of the rise in its policy rate to filter through the economy.