The Federal Reserve's latest survey of nationwide economic conditions found strong growth in almost every part of the country but little inflation in December and early this month, a summary of the results released yesterday said.

"Consumer spending growth was rapid during the holiday shopping period and many retailers expect the high level of activity to continue into early 2000," the summary said. "Manufacturing continued to expand in nearly every [Federal Reserve bank] district and was broadly based across industries."

Along with the rapid growth, "labor markets remained tight in all districts," it continued. "However, the tight labor markets did not seem to be matched with large wage increases. Most consumer prices appear to be holding steady in much of the country."

With evidence that consumer spending and business investment are continuing to increase at a pace that could make the nation's tight labor markets even tighter and eventually trigger inflationary wage increases, Fed officials are expected to raise their target for short-term interest rates at a meeting Feb. 1 and 2. The survey--known as the "beige book" for the color of the cover of the report--was prepared by the 12 regional Federal Reserve banks for the officials' use at the upcoming meeting.

"The bottom line," said economist Jennifer Rossum of Stone & McCarthy Research Associates, a financial markets research firm, "is that with their business contacts reporting continued tight labor markets, Fed officials should find in this beige book report some ammunition for a quarter-percentage point tightening on February 1-2. They don't necessarily need more ammunition, but more is preferable," since Fed Chairman Alan Greenspan will have to explain the action in testimony before the House and Senate Banking committees in mid-February.

Some other economic sectors, including both residential and commercial construction and bank lending, were described as "mixed." And a few manufacturing industries, such as food, apparel and agricultural equipment, were either contracting or not expanding.

"Most districts reported steady consumer prices," the summary said. "Businesses cited competition and increased productivity as reasons for not increasing their output prices, even in the face of increases in prices of some raw materials."


Highlights from the Federal Reserve's survey of nationwide economic conditions:

Kansas City, Mo.: Solid growth; retailers reported exceptional holiday sales.

Cleveland: On a strong growth trajectory; low unemployment.

New York: Economic growth shows few signs of slowing.

Philadelphia: Manufacturers posted increases in shipments.

Richmond: Rapid growth, with retailers posting better-than-expected holiday and post-holiday sales.

Dallas: Energy industry on the rebound; retailers and services reported strong demand.

San Francisco: Tight labor markets and modest to strong wage pressure.