WASHINGTON (Reuters) - U.S. economic activity continued to expand in October and November, with lower gasoline prices boosting consumer spending, the Federal Reserve said on Wednesday.
In its Beige Book report of anecdotal information on business activity collected from contacts nationwide on or before Nov. 24, the U.S. central bank said a number of its districts remained optimistic about the outlook.
“Consumer spending continued to trend higher in most districts in October and November,” the Fed said. “Some contacts viewed lower gasoline prices as a contributing factor to higher consumer spending, and an early cold spell helped spur sales of winter apparel in several districts.”
The report, compiled by the Federal Reserve Bank of Chicago, is in line with manufacturing and employment data that have suggested the economy was weathering slowing global demand.
Despite a sharp drop in crude oil prices, drilling activity in shale production districts remained steady, the Beige Book showed.
“In early November, oil and gas exploration activity decreased in North Dakota and increased in Montana relative to a month earlier; production remained at record levels,” the Fed said. “Despite recent declines in oil prices, officials in North Dakota expect oil production to continue increasing over the next two years.”
Oil prices have declined since June and touched a five-year low early this week, reflecting in part slowing global economic growth and increased domestic production in the United States.
The Beige Book found that employment gains were widespread across the districts.
Strengthening labor market conditions resulted in employers in some districts struggling to retain key workers as well as fill job openings in sectors such as information technology, engineering, legal and health services, manufacturing and transportation.
While inflation remained subdued, a number of districts reported slight-to-moderate increases in labor costs.
“Upward wage pressures continued to be evident for certain types of occupations and for skilled workers,” the Fed said.
Reporting by Lucia Mutikani; Editing by Paul Simao