Economy picking up, fed says

WASHINGTON — The economy is gaining momentum, bolstered by home building, shipping and even the country’s beleaguered manufacturing sector, the Federal Reserve said Wednesday in a newly upbeat assessment.

Evidence of a strengthening economy showed up in other reports as well.

The Commerce Department said consumer spending shot up by 0.7 percent in October, the best showing since July, as Americans’ incomes, the fuel for future spending, rose by 0.6 percent. The gain in incomes reflected the big increase of 337,000 payroll jobs in October, the best in seven months.

Meanwhile, the Institute for Supply Management reported that its main index for measuring industrial activity performed better than expected, rising to 57.8 in November from 56.8 in October.

The Federal Reserve said that reports from its 12 regions “generally paint a picture of continued economic growth” from mid-October through mid-November with improvements noted in a number of areas.

In fact, the Fed survey said that 11 of its 12 regions reported expanding economic activity with only the Cleveland Fed district seeing little change.

The Fed’s latest “Beige Book,” named for the color of its cover, will be used when policy-makers meet for their last discussion of the year on Dec. 14. It is widely expected that the Fed will raise interest rates for a fifth straight time this year in an effort to make sure that the rebounding economy does not trigger unwanted inflation.

The reviving economy has been having an impact on inflation in such industries as energy, transportation and food, but the Fed said retailers are still having difficulty passing those increased costs on to consumers because of stiff competition.

The Fed survey showed rising demand for manufactured goods, encouraging news for a portion of the economy that has seen the loss of 2.7 million jobs over the past four years.

There was rising demand for chemicals, food and a variety of products used in the aerospace, agriculture, energy, construction, medical and defense industries, the report said.

The rebound in manufacturing was helping job markets, and some areas of the country were even experiencing labor shortages for such occupations as accounting, construction and skilled professionals in the energy industry.