A Federal Reserve survey released Wednesday showed eleven of the Fed banking districts reported "modest to moderate" growth, while Dallas reported "strong" growth for the second straight survey.
Housing construction and home prices improved, while consumer spending increased in most districts, fueled by rising car and truck sales. The housing recovery is also driving more production of lumber, materials and construction equipment.
The report says hiring held steady or increased in most districts. But employers in some districts were reluctant to hire permanent or full-time workers.
Five districts reported strong auto sales, up from just three in the previous report. Retail sales rose in nearly all districts except for New York.
The Beige Book survey is based on anecdotal reports from businesses. The latest report painted an optimistic picture of an economy growing at a steady pace. Job gains have picked up this year, bolstering incomes and enabling consumers to spend more.
Employers have added an average of 202,000 jobs a month this year, up from about 180,000 a month in the previous six months.
Still, growth has been weak. Most economists expect growth slowed in the April-June quarter to an annual rate of 1 per cent or less, down from a tepid 1.8 per cent rate at the start of the year. That would mark the third straight quarter of growth below 2 per cent.
Many economists are hopeful that growth will rebound in the second half of the year.
Recent reports, however, have painted more of a mixed picture. Americans bought more on cars, clothes and furniture in June, but cut back retail spending almost everywhere else. Excluding volatile purchases of autos, gas and building materials, retail sales rose at the slowest pace since January.
Factory output grew in June for the second straight month, a separate Fed report said, a sign manufacturers are recovering from a slow start to the year.
Fed Chairman Ben Bernanke told Congress Wednesday that the economy has improved since the Fed launched its bond-buying program in September. He reiterated that Fed policymakers may decide to scale back the purchases later this year, if the improvement continues.
But he also said the Fed wants to see substantial progress in the job market before that happens.
The information in the Beige Book will be discussed along with other economic data during the Fed's policy meeting on July 30-31. It is unlikely to accelerate the Fed's timetable for slowing its stimulus, economists said.
One of the strongest parts of the economy this year has been housing. Home sales and prices began recovering a year ago and sales of previously occupied homes topped 5 million in May for the first time in 3 1/2 years. Prices are rising at the fastest pace since housing bubble burst seven years ago.
Rising home prices tend to make homeowners feel wealthier and more likely to spend. That drives more growth because consumers' spending accounts for roughly 70 per cent of economic activity.
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