The US Federal Reserve said its 12 district banks saw “stabilization or modest improvements” in many areas of the economy, led by housing and manufacturing, while all regions reported a weak or declining commercial real estate market. The Fed said on Wednesday in its Beige Book business survey, published two weeks before officials meet to set monetary policy, that demand for bank loans was “weak or declining,” and many districts reported a “further erosion of credit quality.” The central bank survey indicates that the economy, while gaining momentum, has yet to overcome weaknesses in banking and employment. Unemployment rose last month in 23 US states, wholesale prices unexpectedly fell and builders broke ground on fewer homes than forecast, giving central bankers more reason to hold the main interest rate at a record low to stoke a recovery. The report cited continued “weak or mixed” labor markets. Economists surveyed by Bloomberg News predict the jobless rate will reach 10 percent by the end of the year. “Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered,” the Fed said. Meanwhile, new claims for US unemployment benefits rose again after dropping for two weeks, the government said Thursday in a reflection of labor market problems in the recession-hit country. The seasonally adjusted number of jobless claims in the week to Oct. 17 rose 2.1 percent or 11,000 to 531,000 from the previous week's revised figure of 520,000, the Labor Department said. The four-week moving average, which smooths out week-to-week volatility, however fell slightly to 532,250 - a drop of 750 from the previous week's revised average of 533,000. the total number of Americans receiving unemployment benefits also shrank. The Labor Department's figures showed the number for seasonally adjusted insured unemployment during the week ending October 10 was was 5.923 million, a decrease of 98,000 from the preceding week's revised level of 6.021 million. The department also said the country's insured unemployment rate was 4.5 percent, a decrease of 0.1 percentage point from the prior week's revised rate of 4.6 percent. The weekly report offers one of the most up-to-date snapshots of the job market, critical to the recovery of the US economy which has been in recession since December 2007. For the labor market to balance, some say claims should reach around 350,000.
