The U.S. economy is resilient amid slowing global growth, but some parts of the country are seeing a weaker expansion.
Growth increased in most of the Federal Reserve's 12 districts from early January to late February, but the circumstances varied by region and by sector, the Federal Reserve reported Wednesday.
Consumer spending rose in most Fed districts, and labor markets continued to improve, according to the Fed's Beige Book. "Across the nation, business contacts were generally optimistic about future economic growth."
Moderate growth was reported in Richmond and San Francisco, while a modest pace was seen in Cleveland, Atlanta, Chicago and Minneapolis. Philadelphia had a slight increase in activity, and in St. Louis, conditions were mixed, the Fed said. In New York and Dallas growth was flat, while Kansas City had a modest decline.
"We think the Beige Book is an accurate snapshot of where the U.S. economy is right now. In a word, it's uneven," Jim Russell, a vice president and portfolio manager at Bahl & Gaynor Investment Counsel.
Areas with exposure to manufacturing and the energy sector showed weakness, Russell noted.
The job market continues to improve, but wage growth "varied considerably" across districts, and consumer prices were generally flat, according to the Fed.
The varied state of the economy comes ahead of a two-day monetary policy session starting March 15. The Fed is not expected to hike interest rates further at this month's meeting, after an initial increase from near zero in December.
"We do think the data is coming together in a way that perhaps puts a rate increase or two back on the table for 2016," Russell said. "The recent data suggest there is a better chance in June for possible Fed action than we thought just a month ago."