The U.S. economy continued its expansion through mid-2015 as auto sales and lending picked up around the country, although wage pressures remained "modest," according to the Federal Reserve's latest survey of regional economic conditions.
Seven out of the 12 Fed districts reported its business contacts were "optimistic," according to the central bank's "beige book" released on Wednesday.
The anecdotal survey conducted by the Fed's 12 regional banks covers the period from mid-May through June. It supports the views of some Fed officials who have been calling for a raise in interest rates sooner rather than later.
Employment levels ticked up across the nation, with payrolls growing in particular for service industries like human resources, construction and information technology. Several districts cited ongoing tightness in the job market for high-skilled and specialized workers.
Business contacts in several districts noted that recent minimum-wage increases around the country as well as announcements of wage increases at large national retailers could lead to wage pressures as other businesses "compete to remain attractive employers."
Lending activity picked up across the board, with real-estate lending up in half the districts and auto loans up in several as car sales picked up across all districts except St. Louis.
Federal Reserve Chairwoman Janet Yellen said Wednesday the central bank was on a path to raise short-term U.S. interest rates this year as the domestic economy improves even against a backdrop of global threats.
The central bank has kept short-term interest rates near zero since the end of 2008 in order to spur economic activity during the financial crisis and subsequent recession. The uneven recovery, which has seen job growth pick up but wages and inflation remain relatively flat, has led to debate about whether and when to raise interest rates.
"If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy," she said in her semiannual testimony to Congress.
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(END) Dow Jones Newswires
July 15, 2015 14:50 ET (18:50 GMT)
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