The U.S. central bank says that country's economy continued to show mixed signals from late November to early January, with improvements in the labour market and consumer spending offset by the drag of a strong dollar and low energy prices.
U.S. economic activity expanded in nine of the country's 12 districts, the Federal Reserve said in its Beige Book report of anecdotal
information on business activity collected from contacts nationwide. The Boston Fed described economic activity as upbeat, while the New York and Kansas City districts described it as essentially flat. Most others described activity as modest.
Half the U.S. central bank's districts said the outlook for future economic growth remained mostly positive.
But while the labor market continued to improve and most districts reported "slight to moderate" growth in consumer spending, other sectors showed further strain.
The Fed added that most manufacturing sectors weakened and "several districts reported the strong dollar's negative impact on demand."
Elsewhere, most areas of the energy sector "struggled further" as oil and gas prices continued to drop. The Cleveland and Kansas districts reported that warmer-than-usual temperatures "increased already abundant inventories of oil and gas and kept downward pressure on already low energy prices."
The Fed raised interest rates last month by a quarter-percentage point from near zero, the first such hike in almost a decade.
On the whole, Fed policymakers see a further four quarter-point increases in 2016 but have made clear that would depend on incoming data and a tangible move in inflation toward the Fed's 2% target.
