Beige Book: slight growth in most regions

Most areas of the country reported slight economic improvement in September and earlier this month, according to a Federal Reserve survey of its 12 bank regions. But several regions said a hazier economic outlook is making businesses more cautious and prompting them to hold back on spending.

The Fed said Wednesday that consumer spending rose slightly in most districts. A key reason was more people bought new cars, partly because dealers had a greater selection.

Manufacturing also rebounded, particularly in the auto industry, which had been hampered since the March earthquake in Japan.

Still, in some regions businesses outside the auto industry reported a weaker and more uncertain outlook, which raised caution and weighed on business spending plans.

Three of the regions -- Philadelphia, Richmond, Va., and Chicago -- indicated many retailers were reluctant to build up their stockpiles ahead of the holiday season because of sliding consumer confidence.

The Fed report, known as the Beige Book, covered the period from Aug. 27 through Oct. 7. The previous survey found growth more uneven across the country following a difficult summer that saw wild swings in the stock market.

Recent data suggest growth picked up in the July-September quarter. In September employers added 103,000 net jobs, and consumers increased their spending on retail goods by the most in seven months.

Stronger spending could tamp down concerns that the economy is teetering near recession. Consumer spending accounts for 70 percent of economic activity. Americans cut spending this spring in the face of higher food and gas prices.

Hiring remains sluggish in most districts, and wages are largely stagnant. "A month ago a lot of people were worried about the possibility of a double-dip recession. This report shows we are not headed down, but we are still expanding at a very slow pace," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.