U.S. economic activity continued to expand gradually in July and early August, according to the Federal Reserve's Beige Book report released Wednesday.

The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions from each of the twelve Fed districts.

While six districts indicated that the local economy continued to expand at a modest pace, another three cited moderate growth.

Lou Brien, market strategist at DRW Trading, said, "In a general sense it could be said this was an improvement from the previous Beige Book from July, when eight of the twelve Districts said economic activity continued to expand at a modest to moderate pace."

"Overall, there is little to distinguish this report from the previous one," he added. "Any differences are modest, or maybe moderate, well maybe the change is gradual."

The report showed that most districts said retail activity had increased since the last Beige Book report in July, although several districts noted that the improvements were small.

Auto sales were up in the New York, Philadelphia, Atlanta, St. Louis, Minneapolis, and Kansas City districts, flat in Cleveland, Chicago, and Dallas, and a bit slower paced in Richmond and San Francisco.

Meanwhile, the Beige Book said that the picture for the manufacturing sector was mixed.

While the Boston, Chicago, Kansas City and San Francisco districts reported increasing demand and sales, six districts said demand for manufactured goods was actually falling,

The Fed said the outlook for manufacturing was somewhat more positive, with six districts reporting that manufacturers expected increasing demand and only two reporting the opposite.

Regarding the housing market, the Beige Book showed that all twelve Fed districts cited increases in home sales, home prices, or housing construction.

The Fed said the reports on commercial real estate markets were also generally positive, although San Francisco noted stable demand.

Reflecting continued sluggishness in the jobs market, most districts reported that employment was holding steady or growing only slightly

Upward wage pressure subsequently remained contained, although the Philadelphia and Chicago districts noted that despite little wage pressure, some contacts reported upward pressures for medical benefits.

RTTNews