U.S. spending up, though storm hurt this region

WASHINGTON - A pickup in consumer spending and steady home sales helped lift economic growth from October through early November in most parts of the United States, according to a Federal Reserve survey released Wednesday. The exception was the Northeast - including Philadelphia - which was slowed by Hurricane Sandy.

Growth improved in nine of the Fed's 12 regional districts, said the survey, known as the Beige Book. Growth was weaker in the Philadelphia, New York, and Boston districts - areas where Sandy caused widespread disruptions.

"Overall, the storm left over 100 people dead, 8.5 million customers without power across 21 states, thousands of homes damaged or destroyed, and tens of billions of dollars of damage and economic disruption," the Federal Reserve Bank of Philadelphia said in its portion of the survey.

Residents and businesses in its region "bore a substantial share of the damage" and the area's economy "lost a couple of days' output," the Philadelphia Fed said.

The survey noted that growth nationally was better despite nervousness about the fiscal cliff.

Hiring increased in more than half of the districts. But manufacturing shrank or slowed in seven regions, including Philadelphia, and was mixed in two others.

"The weakening in the tone of the Beige Book is clearly linked to the massive disruptions and damage related to Hurricane Sandy, and there is no evidence of a wider slowdown in the economy," said Terry Sheehan, an analyst at Stone & McCarthy Research Associates.

The report provides anecdotal information on economic conditions around the country from October through Nov. 14. The information collected by the regional banks will be used as the basis for the Fed's policy discussion at its meeting Dec. 11 and 12.

Many economists believe the Fed could announce plans to buy more Treasury bonds at that meeting to replace a program set to expire at the end of the year. The goal of the program is to lower long-term interest rates and encourage more borrowing and spending.

The purchases would come on top of the Fed's mortgage bond buying program, which is intended to lower mortgage rates and make home-buying more affordable.

The Beige Book said price increases remained modest. The Fed said the prices of some construction materials were rising at a faster pace in the Cleveland, Chicago, Minneapolis, Kansas City, and San Francisco regions. Chicago Fed officials noted that food prices had eased in that region except for the price of meat.