Federal Reserve survey optimistic about US economy

The US economic outlook has become "cautiously optimistic", and overall, economic activity "continued to stabilise", says the latest issue of the Federal Reserve's influential Beige Book.
 
Five of the 12 districts surveyed said there were signs of improvement, with five showing signs of stabilisation since the last report in July.
 
Most regions reported some improvement in residential property markets, despite "downward pressure on home prices" and "modest improvements" in the manufacturing sector.
 
But the report also found that retail sales in the majority of districts remained flat, with weak demand for commercial property and demand for loans.

The Beige Book, compiled eight times a year and used to help set interest rates, is based on a survey of business views from around the US.

Figures released on Tuesday showed that US consumers slashed their borrowing by a record amount in July.
 
Meanwhile, private economists polled for the Blue Chip Economic Indicators September survey say the unemployment rate will reach at least 10 per cent in early 2010 and "recede from that level only grudgingly over the second half of the year".

More than 80 per cent of the 52 private forecasters polled say the recession that started in December 2007 has ended. They look for gross domestic product to expand at a brisk 3 per cent annual rate in the third quarter of 2009 and rise 2.4 per cent in the fourth quarter.

This compares to growth rates of 2.2 per cent and 2.3 per cent, respectively, forecast in the previous survey.

For the year as a whole, the economy is expected to shrink 2.6 per cent, the same consensus for July and August. In 2010 the economy will likely expand at a 2.4 per cent pace, the survey said.