According to a recent report that was issued by the U.S. Federal Reserve, economic recovery is considered to be on pace. The agency was certain to note that while recovery is coming along, that it’s at a snail’s pace, coining the current pattern as “moderate,” “modest” and “measured.”
This comes four years after the Great Recession has been officially declared over.
“Overall economic activity increased at a modest to moderate pace since the previous report,” the Federal Reserve said in its latest Beige Book report, released Wednesday afternoon.
In the report, the word “moderate” was used 56 times, emphasizing the cautious approach the Fed took. Hiring was imbibed at a “measured pace,” and pricing was deemed to be rising at a “mild” pace.
The Beige Book is populated using statistics that are gathered from the Federal Reserve’s 12 regional districts.
The report, while admittedly guarded, is not thought to slow down the U.S. economy by fomenting fear in investors and consumers, and it will not change the Fed’s approach to mending the U.S. economy—something that was recently seen in the $85 billion stimulus package that was unveiled by the Fed, and as CNN Money puts it: to buy back “Treasuries and mortgage-backed securities each month in an effort to lower long-term interest rates.”
Federal Reserve Chairman Ben Bernanke has also issued a stern warning that “premature tightening” could push the Fed to ease back on purchases, something that could be discussed over the “next few meetings.”
According to recent statistics, the U.S. economy gained 2 percent during the month of May. 158,000 jobs were added, and the unemployment rate still is hovering at about 7.5 percent. Over the past year, job gains averaged about 173,000 each month, marking a slower pace than was anticipated in May.
As of 2:09 p.m. ET today, the Dow Jones Industrial Average fell 174 points, or 1.2%, to 15002, the S&P 500 dipped 17.9 points, or 1.1%, to 1613 and the Nasdaq Composite slumped 34.8 points, or 1%, to 3410.
UCLA Anderson Forecast director Edward Leamer wrote in his April report that: “U.S. real GDP is now 15.4 percent below the normal 3 percent trend. To get back to that 3 percent trend, we would need 4 percent growth for 15 years, or 5 percent growth for eight years, or 6 percent growth for five years, not the disappointing twos and threes we have been racking up recently, which are moving us farther from trend, not closer to it. It’s not a recovery. It’s not even normal growth. It’s bad.”