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BBC NEWS-US recovery 'gathers pace'

US consumers are still spending
A tentative revival in the US economy accelerated last month, according
to a closely-watched survey.

The US Federal Reserve said it its 'beige book,' a snapshot of economic
conditions around the country, that the pace of economic expansion had
picked up in most regions, helped by robust consumer spending and an
increasingly buoyant manufacturing sector.

"On balance, the pace of economic expansion has picked up since the last
report," the Fed said.

The report, which will feed into the Fed's interest rate decision later
this month, will be welcomed by investors looking for confirmation that
a recovery is under way after three years of patchy growth.

However, most ****ysts still expect the Fed to leave interest rates on
hold at their current 45-year low of 1% at their meeting on 28 October.
Jobs outlook

The latest report, one of eight compiled every year, said prices and
wages were stable across the country, in a sign that inflationary
pressures remain weak.
It also held out a glimmer of hope that the depressed jobs market may be
improving, highlighting an increase in demand for temporary workers in
New York, Chicago, Dallas and other cities.

An increase in temporary job vacancies is sometimes seen as a sign that
companies are starting to hire again.

US unemployment has surged to its highest level in a decade in the past
three years, fuelled by a swathe of lay offs as firms rush to cut costs
in the face of a protracted downturn.

The Fed also highlighted evidence that the manufacturing sector, which
has been hit harder than any other part of the economy, may also be
beginning to emerge from the doldrums.

The central bank said orders for machine tools had risen in Chicago and
Atlanta, while demand for computer chips picked up in San Francisco and
Texas.

On the consumer side, spending remained robust and demand for new houses
was also buoyant, the Fed said.

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