WASHINGTON -- The U.S. economy was expanding in all regions of the country in the late spring, aided by strong sales of autos and other consumer goods.
In its latest survey of business conditions, known as the beige book, the Federal Reserve said Wednesday that some of its regions reported that lower energy prices were encouraging consumers to shop and eat out more. Growing sales of homes and commercial real estate also boosted the economy.
Economic activity in the St. Louis Region, which includes Arkansas, "increased at a moderate pace since the previous Beige Book," the report said.
The Fed report said employment growth in the region remains modest but that "employers continued to note a shortage of qualified employees, especially in the commercial construction industry where companies are experiencing a smaller pool of job candidates."
Home sales in the St. Louis district increased on a year-over-year basis in May with sales rising 5 percent in Louisville, Ky.; 10 percent in Little Rock; 4 percent in Memphis; and 3 percent in St. Louis. Home construction in May was mixed compared with the same period a year ago. The number of single-family home building permits issued in May increased 25 percent in Little Rock and 17 percent in St. Louis. Permits were flat in Memphis and fell 14 percent in Louisville, the report said.
Employment growth across the nation was solid, although some layoffs were reported in manufacturing and energy industries, which have cut back because of falling prices.
The Fed report will be used by officials when they meet July 28-29 to consider interest rate policies. The Fed is not expected to start raising rates until at least September.
Fed Chairman Janet Yellen told Congress on Wednesday that she is encouraged by signs of an economic rebound after a brutal winter. If the economy and job market keep improving, she reiterated that the central bank will likely begin raising interest rates later this year. The Fed's benchmark rate has been at a record low near zero for more than six years.
In the beige book, the Fed found that inflation has remained steady, with only modest upward pressure on wages outside of some positions requiring specialized skills.
Manufacturing activity was described as uneven. Four districts -- Philadelphia, Atlanta, Chicago and Richmond, Va. -- reported gains in factory production.
But three districts -- Cleveland, Dallas and Kansas City, Mo. -- reported declines in manufacturing. Some of the weakness was blamed on the rising value of the dollar, which was hurting exports, and cutbacks in demand for equipment in the energy sector.
Producers of primary metals such as steel generally reported strong demand. Solid growth also bolstered the aerospace, construction and plastics industries.
Home sales were stronger across most parts of the country. Commercial real estate was also on the upswing, with low and declining vacancy rates for many properties.
Heavy rainfall caused crop damage in the Chicago and St. Louis districts. Chicago also reported disruptions in grain shipping because of higher water levels on the Mississippi River.
Kansas City said heavy rains had lowered expectations for winter crop harvests. But the Dallas district said heavy rainfall had relieved drought conditions. San Francisco reported ongoing drought conditions in California.
The Chicago and San Francisco districts both reported that outbreaks of avian flu were resulting in higher prices for poultry and eggs.
The beige book report, formally known as the Summary of Commentary on Current Economic Conditions by Federal Reserve District, is published eight times a year ahead of each meeting of the Federal Open Market Committee.
Business on 07/16/2015