WASHINGTON — The Federal Reserve's latest look at business conditions nationwide finds that the economy kept expanding during the summer. Housing and auto sales were two bright spots.
However, manufacturers were starting to feel pressure from an economic slowdown in China. The oil industry was also being hit by the drop in energy prices.
The Fed says that 11 of its 12 regional banks found that the economy was growing at either a moderate or modest pace in July through mid-August. Cleveland reported just slight growth during that period.
The Fed report, known as the Beige Book, will be used for discussion when the central bank next on Sept. 16-17. The gathering will be closely watched because of the possibility it will decide to start raising interest rates.
The recent stock market turbulence, triggered by worries about China's economic slowdown, caused some analysts to lower the odds for a Fed move in September. But other economists still believe a Fed rate hike this month is likely, especially if markets stabilize and Friday's unemployment report shows strong job gains continued in August.
The Beige Book survey, which covers July through mid-August, showed a somewhat mixed picture for manufacturing, with 10 regions reporting stable or positive growth overall but New York and Kansas City seeing declines.
The Boston, Philadelphia, Cleveland, Richmond and Dallas districts all said that a strong dollar had dampened manufacturing activity, while three districts cited the economic slowdown in China as exerting an adverse influence on some activities.
The Chinese slowdown had cut into demand for wood products in the San Francisco district, chemicals in the Boston area and high-tech goods in the Dallas region.