Fed: Economic Activity Growing Despite Energy Prices

Click here to write a Letter to the Editor.

conomic activity expanded in September and early October, but was constrained by high energy costs, the Federal Reserve reported Wednesday.

The Fed made the comments in its regular survey and report on economic activity known as the "Beige Book." The Federal Reserve Bank of Chicago prepared the report, which was based on information collected before October 18, 2004.

"Reports on consumer spending . . . were mixed by district and spending category," the Fed said in a statement. "In contrast, business outlays appeared to pick up in most regions, with modest increases in both capital spending and hiring."

The Cleveland Fed said that demand for trucking and shipping services continued to be strong, and one contact reported turning business away because of a lack of personnel. Cleveland also said an increase in the demand for new trucks had led to longer truck delivery times.

Meanwhile, New York said container volume has continued to strengthen, due to growing imports and the diversion of some shipments from West Coast ports.

Atlanta and Chicago reported a strong demand for freight shipments, while Dallas, Richmond and Philadelphia all said manufacturers were seeing more activity.

Overall, companies surveyed said they were worried about higher prices for energy and petroleum-based products, metals and construction materials, Bloomberg reported.

In addition, retail inflation still "largely subdued," the Fed said.