Fed sees widening gap between rich and poor households in US

JPMorgan expects rate cut in December as firms report tighter margins

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Shoppers in the SoHo neighbourhood of New York City on Nov 24. In a report based on information collected by the Fed's 12 regional banks, multiple districts, including New York and Atlanta, found that spending by upper-income consumers was resilient, but was flagging for low- and middle-income households.

(PHOTO: BLOOMBERG)

US economic activity was little changed in recent weeks, though overall consumer spending declined further except among higher-end shoppers, the Federal Reserve said.

Employment declined slightly and prices rose moderately, according to the US central bank’s Beige Book survey of regional business contacts released on Nov 26.

“Outlooks were largely unchanged overall,” the Fed said. “Some contacts noted an increased risk of slower activity in coming months, while some optimism was noted among manufacturers.”

The report was based on information collected by the Fed’s 12 regional banks through Nov 17 and compiled by the Federal Reserve Bank of Dallas.

Multiple districts, including New York, Atlanta and Minneapolis, reported that spending among upper-income consumers was resilient, but was flagging for lowand middle-income households.

“Contacts noted that higher-income customers were unconstrained, but ‘customers in the middle to lower end of the financial spectrum are tightening the belt’, said one contact,” according to the Minneapolis Fed.