WASHINGTON - The economy continued to expand "at a slow to moderate pace" in most parts of the country last month as manufacturing, home building, and consumer spending showed improvement, the Federal Reserve said yesterday in a report.

The Fed's "beige book" also says businesses generally reported no price pressures and small wage settlements, indicating a continued absence of inflationary pressures as the economy strengthened.

The report serves as a guide for members of the Federal Open Market Committee, which is scheduled to meet Nov. 16 to review monetary policy. It is based on information collected through late October from the 12 Federal Reserve district banks.

Most analysts expect Fed policy-makers at the meeting to keep the federal funds rate at 3%, where it has been for more than a year.

Economists are convinced that the economy will put in its best performance of the year in the current quarter, possibly growing as rapidly as 4% on gains in housing and auto production.

The Fed's report did not tell market participants anything new, said Donald Fine, chief market strategist for Chase Securities Inc. The debate now is what will happen next year, and whether growth will exceed a moderate pace of around 2 1/2%, Fine said. For now, "most people would tell you that the Fed is not expected to change their policy."

Consumer spending rose in most districts, "with particular strength" in sales of automobiles and other durable goods, the Fed report says. Sales of furniture and appliances were called strong in many districts, reflecting gains in home sales and remodeling. In addition, some auto dealers reported that inventory shortages developed before the arrival of the 1994 models.

Most districts also said manufacturing firms were seeing more business, especially auto makers and parts suppliers.

In Boston, a region that was hit hard by the recession, some manufacturers reported double-digit pins in sales of new products compared to a year earlier. Cleveland said domestic orders for capital goods were running 10% above year-earlier levels for some companies. Chicago said manufacturing activity "picked up considerably," especially in the auto industry.

Most districts also said residential real estate markets were doing better, and several cited sales of new and existing homes "as a major source of strength in their economies," the Fed report says.

There were also scattered signs that the long-dormant commercial real estate sector is starting to recover. The report says commercial realtors picked up business in the New York and Richmond districts, while Atlanta "saw signs of a revival in commercial construction."

Overall, the two main weak spots in the nation continued to be California and the New York district.

California is still suffering from weakness in aerospace and defense-related manufacturing and construction, the report says. But "some improvement" was reported in electronics and retail trade, and some businesses outside the southern part of the state said they were slightly more positive about a pickup in business.

In New York, retailers reported mixed sales, and home building showed "only a slight pickup in traffic and contract in some areas," the report says. Unemployment rates remained high, and bank loan officers at small and midsized banks reported no change in their readiness to lend.

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