The Federal Reserve's Beige Book, a summary of economic activity across the nation, was released within the past hour, and this closely scrutinized compilation indicated that the nation's economy was pressing forward at a moderate pace. It also opined that the business outlook was positive.

That upbeat combination of favorable economic conditions and the solid outlook suggests the Federal Reserve will remain wedded to its current monetary tapering schedule, which involves, we think, the continued pulling back in its stimulus program. The Fed commenced this well-chronicled effort last month. The next FOMC meeting is January 28th and 29th. This will be the final meeting before Janet Yellen takes over as the next Fed Chair.

Meanwhile, the Beige Book found that consumer spending was higher; manufacturing was continuing to grow steadily; and real estate was improving in most Districts, as well. Moreover, eight of the 12 Federal Reserve Districts reported increases in hiring, while wage and price pressures were found to still be contained. Still, some service-sector participants report that they are planning to raise selling prices in the near future.

Looked at on a region-to-region basis, nine of the 12 Fed Districts saw conditions continuing to improve compared with the previous reporting period that ended some six weeks ago. Boston and Philadelphia, though, reported only modest gains, while Kansas City noted that things were just holding steady.

At the same time, the overall outlook was positive in most Districts, with some reports citing expectations of “more of the same” and some expecting a pickup in growth. For those Fed watchers hoping for some sign that the central bank would now opt to go more slowly on the monetary contraction front, this latest Beige Book was not hopeful.

On the whole, this report was a case of more of the same, as the observation was noted above. Our sense, moreover, is that the economy is growing nicely, with just a few speed bumps along the way, such as the December employment survey issued last Friday, which noted that just 74,000 jobs had been added to the nation's job rolls last month. We think that survey was more of an outlier than not, and is not likely to be given support by upcoming reports.  

At the time of this article's writing, the author did not have positions in any of the companies mentioned.