The Federal Reserve said Wednesday that the U.S. economy continued to expand in most regions as businesses benefited from a bounce-back from harsh winter weather earlier in the year.
Eight of 12 Fed districts characterized growth as “modest or moderate,” the Fed said in its Beige Book business survey, based on reports gathered before April 7. Economic growth in Chicago “picked up” while New York and Philadelphia saw a rebound from weather-related slowdowns, the report said.
The Cleveland and St. Louis districts reported declines. Arkansas is in the Fed’s St. Louis district.
The Beige Book gives the Federal Open Market Committee anecdotal in-formation about the state of the economy before it meets April 29-30 to discuss monetary policy. The committee last month decided to reduce monthly bond purchases to $55 billion from $65 billion and scrapped its pledge to keep interest rates low as long as unemployment was above 6.5 percent.
“Consumer spending increased in most Districts, as weather conditions improved and foot traffic returned,” according to the Beige Book. “Auto sales were up in the New York, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, and San Francisco Districts” and “assessments of tourism were generally positive.”
The report from the St. Louis district said “residential real estate conditions have deteriorated slightly, while commercial real estate market conditions have been mixed.”
Small and midsize banks in the region reported a slight decrease in lending from mid-December to mid-March.
Total home sales were up 7 percent in Little Rock compared with January last year, the report said. The other large metropolitan areas in the district, Louisville, Ky., Memphis and St. Louis, all reported declining home sales.
The Commerce Department reported this week that retail sales in March climbed the most since 2012. The 1.1 percent advance, a result of more spending on cars, clothing and garden supplies, reflected a rebound from a weather-depressed start to the year.
The labor market crossed a milestone last month after private employment exceeded the pre-recession peak for the first time. Payrolls excluding government agencies rose by 192,000 workers in March after a 188,000 gain in February that was larger than first estimated, the Labor Department reported April 4. The jobless rate held at 6.7 percent.
“Labor market conditions were mixed but generally positive,” according to the Beige Book. “The New York, Cleveland, Richmond, Chicago, Kansas City, and Dallas Districts reported difficulty finding skilled workers.”
Still, “in most Districts, wage pressures were contained or minimal,” the report said.
Manufacturing improved in most regions, while residential housing conditions were more “varied,” the Fed said. Prices were “generally stable or slightly higher,” according to the report.
The personal consumption expenditures price index - the Fed’s preferred inflation measure - rose 0.9 percent in the year through February, more than a percentage point below the central bank’s goal.
Business, Pages 23 on 04/17/2014