For the last two months, the U.S. economy has continuously expanded in most of the country's districts. However, not all is rosy since conditions have varied significantly within sectors and across regions, according to the statement issued by the Federal Reserve on Wednesday.
The obviously mixed conditions have given Fed policy makers a headache considering that their meeting is scheduled on Mar. 15 - 16 to decide the direction where interest rates should go.
According to the Beige Book of the U.S. Fed, in most U.S. districts, consumer spending has seen an increase. This source book contains anecdotal information gathered from business contracts all over the country. It is published eight times per year.
While the economy expanded, wage growth has varied widely "from flat to strong," as the report from the Federal Reserve indicate.
Out of the 12 regional districts of the agency, seven have suggested that the country's economy is expanding "moderately," or at a "modest space," or "slightly," based on the Beige Book.
There are mixed reports on the area of manufacturing. This sector has continuously suffered due to the strengthening of the dollar coupled with a "weakening global outlook" where its total sales suffered a number of setbacks.
Federal Open Market Committee members are scheduled for a meeting in two weeks. They will discuss their projections for the economy and establish the U.S. Federal Reserve's benchmark interest rate.
Although the latest jobs, consumer spending and inflation data indicated positive growth, there are still reduced expectations that the rate will increase this month owing to the volatility of the market and global growth.
It is likely that the Fed policymakers will hold off raising the interest rates even after their initial rise from almost zero in December. They still have to determine how big a slowdown global growth will experience, how lower inflation will affect the U.S. economy, and how extensive the tightening in financial conditions will be.