The American economy grew in September and early October despite being buffeted by rising energy costs and increased uncertainty caused by the presidential campaign, the Federal Reserve said yesterday in its last snapshot of business conditions before Election Day.

The survey of business activity around the country, compiled from reports submitted by the Fed’s 12 regional banks, depicted an economy that was moving ahead, with even the hard-hit manufacturing sector beginning to regain its footing after a prolonged period of weakness.

“Economic activity continued to expand in September and early October,” the Fed said in the new survey, which found that the pace of activity had quickened in the Richmond, Va., and Dallas districts. Five other districts – Boston, Philadelphia, Chicago, Minneapolis, and Kansas City – were reporting that steady expansions were under way.

The Fed’s report will be used by central bank policy-makers when they next meet on November 10 to decide whether to raise interest rates further.

Many economists believe that the central bank will push up rates for a fourth time this year in an effort to make sure that a rebounding economy does not generate unwanted inflationary pressures.

Some analysts believe the Fed could decide to pause in its credit tightening out of concerns that rising energy prices, which climbed to record highs of more than $50 a barrel for crude oil, could threaten to derail the economic recovery.

While noting that higher energy costs did seem to be constraining consumer and business demand in some areas, the Fed survey did not signal any worries that this year’s price spike could bring on a recession, as did the oil shocks of the 1970s and early 1980s. The Fed noted that some districts were reporting increased uncertainty stemming from the presidential campaign.

In other economic news, the Commerce Department reported yesterday that orders for big-ticket manufacturing goods edged up a modest 0.2% in September while sales of new homes were up a bigger-than-expected 3.5% to the third highest monthly level on record.

The economy’s performance has become a top issue in the presidential campaign, with President Bush contending that his tax cuts have laid the stage for stronger growth in the years ahead while the Democratic challenger, Senator Kerry, argues that Mr. Bush’s tax cuts represented a windfall for the wealthy while doing little to boost the overall economy.

The better-than-expected 3.5% rise in new home sales pushed activity to an annual rate of 1.21 million in September, the third highest level on record behind only March and May of this year.

The 0.2% rise in durable goods orders in September was only the third increase of the past six months. Orders were up 1.9% in July and 1.3% in June after having posted a 0.6% drop in August and even bigger declines in May and April.

The Fed report, however, found some hopeful signs that manufacturing, which has shed 2.7 million jobs since Bush took office, was beginning to turn the corner with a number of districts reporting rising production.

Both the Atlanta and Dallas districts did report some production disruptions from the hurricanes that hit Florida and other coastal states in September.

The Fed said that wage pressures for the most part remained contained although occupations where workers were in short supply such as truck drivers and skilled trades people were reporting scattered wage pressures.

The Fed said that fall harvests were above normal in much of the country with corn and soybean producers expected to set records in some districts.

The $417 million September increase in orders for durable goods, items expected to last three or more years, pushed the total for the month to $195.7 billion on a seasonally adjusted basis.

Excluding the volatile transportation sector, orders were up a stronger 1.7% last month following a 2.8% increase in August.

The rebound last month was led by a 9.3% increase in demand for computers and other electronic products, reflecting a 35.6% jump in orders for communications equipment.

The strength in new home sales reflected strength in all regions of the country except the West, where sales dropped 0.8% in September to an annual rate of 358,000 homes. Sales were up 12.3% in the Midwest to an annual rate of 238,000 units and posted a 6% increase in the Northeast to an annual rate of 71,000 units.

Sales in the South, where activity was held back by a string of hurricanes, rose by 2.7% to an annual rate of 539,000 units.

The median price for a new home – the midpoint where half the homes sold for more and half for less – dropped to $197,700 in September, down 8.4% from the August median price of $215,900.

On Monday, the government reported that sales of existing homes rose 3.1% in September, also hitting the third highest level on record at a seasonally adjusted annual rate of 6.75 million units.

Home sales have been powered by continued low mortgage rates. The average monthly rate on a 30-year mortgage in September was 5.75%, down from 5.87% in August and 6.15% in September a year ago. Last week rates on 30-year mortgages averaged 5.69%, the lowest level seen in six months.