WASHINGTON — The pace of economic activity and retail sales growth expanded “modestly” in late August and September, the Federal Reserve said in its Beige Book report Wednesday.

Retail sales ticked up in the Fed’s Cleveland, Richmond, Atlanta, Minneapolis and San Francisco districts, according to the report, which provides a snapshot of economic performance in the Fed’s 12 districts.

However, retail sales in the New York and Kansas City districts were said to be “flat to softer.”

Several factors contributed to softer retail sales growth in many regions, including rising gasoline prices, political uncertainty over the outcome of the presidential election and concerns about the “fiscal cliff” facing Congress at the end of the year, which is generally defined as a combination of potentially deep spending cuts and expiring tax breaks for individuals and businesses.

Retailers in Atlanta and San Francisco reported that discounters have been outperforming traditional department stores, while several retailers, including online retailers, in Richmond brought back or began offering layaway programs for the first time.

Spending on apparel and household items remained strong in the Boston district, while some retailers in the New York area reported sluggish sales on seasonal merchandise due to unseasonably mild weather.

Conversely, retailers in the Philadelphia district reported that mild, sunny weather helped boost back-to-school sales. One department store manager said cold-weather clothing was moving better than last year.
Many retailers said they expect an uptick in sales after Election Day on Nov. 6.

“Retail contacts [in Philadelphia] are bullish for the upcoming holiday season, speculating that people will be primed to respond to upbeat holiday advertising after the long, negative political campaign season,” the report said. “An expectation of greater seasonal hiring has been widely discussed. And the holiday calendar provides a 32-day shopping season [between Thanksgiving and Christmas] — the longest possible.”

Merchants in the Cleveland district said it appeared middle-income consumers are holding back on spending until after the elections, although they responded “positively” to back-to-school sales and fall merchandise.

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