Washington, US (BBN)– The US Federal Reserve said the economy grew between April and May in its latest assessment of the economy, rebounding from a contraction in the first quarter.
In the so-called Beige book, it said surveys from across the country suggested “overall economic activity expanded” from early April to late May, reports BBC.
Outlooks among respondents were generally optimistic”, the report said.
Growth in the US unexpectedly shrank in the first three months of the year.
The contraction was mainly attributed to a particularly harsh winter and most economists were expecting a pick-up.
However, the bad weather, combined with the strong dollar, prompted the Organisation for Economic Co-operation and Development (OECD) think-tank to cut its growth forecast for the US earlier on Wednesday.
It now expects the US economy to grow just by 2% this year and 2.8% next year – down from its November forecast of 3.1% and 3% respectively.
The Federal Reserve said that manufacturing activity generally “held steady or increased” over the last two months, while most districts reported an uptick in retail spending, with retailers “expecting continued sales growth in 2015”.
However it pointed out that the energy industry had been hurt by the drop in the price of oil, causing companies to cut back on staff and drilling activities.
The Beige book is a summary of comments received from businesses across the US.
The data helps inform Fed officials about when and if to raise interest rates.
Currently, the Fed’s target interest rate is near zero, where it has been since 2008 when the central bank slashed rates in the wake of the financial crisis.
Now, there is much speculation about when chair Janet Yellen and the other board members will decide that the US economy is healthy enough to grow on its own without help from the Fed.
Most observers think this rate rise will not happen at the central bank’s next meeting in mid-June, but will probably occur in the autumn.