The U.S. economy ended the year strong after nearly slipping into another recession in the spring. The Federal Reserve painted a pretty picture for the economy in a survey it released earlier today. Factories were making more goods, consumers were spending their hard earned money and Americans traveled even more.
The Fed noted that all but one of its 12 banking districts saw growth from late November into the new year. Richmond was the only district that didn’t see a marked improvement. The Fed did note that not all sectors of the economy were strong and pointed to the fledgling housing sector, saying it was still weak.
The auto industry showed good strength last year. Auto sales in Atlanta for instance were the best they’ve seen in more than two years. Tourism also increased with New York, Boston, Atlanta and Richmond also seeing an increase in tourism from the previous year. Businesses in the Northeast are expecting double digit growth in hotel revenue this year.
U.S. manufacturing also saw an increase in the latter part of the year after a weak spring and summer following the devastating earthquake in Japan. The Fed’s report said industries specializing in making heavy equipment and steel did well leading to a boost in energy, farming and auto manufacturing sectors.
Most economists have predicted that the economy grew at an annual rate of 3% for the last 3 months of 2011.
The state of the economic recovery remains fragile though as any setbacks in Europe could have wide ranging impacts closer to home. Consumers could also reign back in spending if their wages continue to not grow.
The Fed’s next meeting will be on Jan. 24 and Jan. 25 and as always investors and economists will be watching it very closely.