Despite all of the gnashing of teeth in Washington, D.C., over all things budgetary, the latest economic roundup from the Federal Reserve suggests that much of the nation is going about its business without much concern. The Beige Book, prepared for the central bank's next policy-setting meeting at the end of January, tells of continued growth since the previous report. The Beige Book comes out two weeks ahead of the gathering of Fed officials. In this case, we're talking about a gauge of what happened in December and early January.
What isn't stated right off the top of the Fed's voluminous report is that the key metric of the job market was reported "mostly unchanged." Here is where some more specific mention of Washington's "fiscal cliff" drama comes into play. It says that in the Boston; Richmond, Va.; Atlanta; Kansas City, Mo.; and San Francisco districts, delayed hiring was reported, mostly in the defense manufacturing sector. But this seems to have been offset by other, more positive factors. The job market was said to be "firming modestly" in the New York, Atlanta, Minneapolis and Dallas regions.
For those looking to future career changes, there's a little nugget included here, too. In several areas of the country, shortages of skilled workers were seen in skilled manufacturing, energy and information technology.
There was also good news in the wake of Superstorm Sandy. The report notes that rebounds were seen in the New York and Philadelphia districts since the previous report. Economists have been telling us that, amid the tremendous devastation from the storm, we could expect to see an acceleration of economic activity this year as rebuilding and renovation take place in the storm-battered regions. The destructive storm hit the region in late October 2012.
While the Fed pledges to keep rates low until the unemployment rate falls to 6.5 percent, it also has a goal of keeping inflation low. The December jobs report, released Jan. 4, had an unemployment rate of 7.8 percent. Regarding potential price pressure, the Beige Book says trends in wages and prices were "relatively unchanged."
Federal Reserve Chairman Ben Bernanke has continued to call on Congress and President Barack Obama's administration to address the nation's long-term fiscal challenges. While the Federal Open Market Committee statement released in mid-December didn't acknowledge the risks directly associated with the budget, Bernanke spoke at length about his concerns during a Q-and-A at the University of Michigan.
The Fed's next meeting is slated for Jan. 29-30.