Econ--The Post + S&P: "No Recession or Widespread Inflation" + "Fed Sees Signs of Slower Growth"
personalwealth.com
>>>But Federal Reserve Bank of Dallas President Robert McTeer said that the recent inflation rise is "mostly due to oil," and it won't lead to widespread inflation. He also said that the rise in oil prices won't knock the economy into recession.<<<
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washingtonpost.com
>>> Fed Sees Signs of Slower Growth
By John M. Berry
Washington Post Staff Writer
Wednesday, September 20, 2000
The U.S. economy continued to expand at a moderate pace last month and early this month but with "further signs of slowing growth" in several parts of the country, according to the Federal Reserve's latest national survey of economic conditions released today.
The findings of the survey, conducted by the Fed's 12 regional banks, were in line with other recent economic reports, which have painted a picture of slowing but still solid growth with only modest inflation outside of the energy area.
The survey results will be used by Fed officials at a policymaking session Oct. 3, at which they are widely expected to make no change in their target for short-term interest rates.
Even with somewhat slower growth compared to the first half of this year, the survey found that labor markets remained tight in most of the country, "although some signs of easing were reported" by the Boston and Kansas City banks.
"Reports of wage increases were widespread and some firms indicated that higher labor costs were an increasing problem," the survey summary, known as the Beige Book after the color of its cover, said. "Nevertheless, there were few indications that higher wages were being passed through to consumers as higher productivity and competitive pressures held firms' prices in check."
The continuing increase in the prices for oil and other types of energy are causing problems for some firms that are heavy users of energy, the Fed banks found. Transportation costs are rising as are production costs for manufacturers. The Minneapolis Fed reported that a copper mine in Montana has halted production until at least November because of "huge increases in electricity costs."
But as with wages, "competitive pressure prevented manufacturers in most [Fed] districts from raising prices," it said, adding, "Several districts indicated that the recent sharp increases in the costs of health care and energy might eventually be passed through to consumers."
The reported slowing was spread across the country and through different parts of the economy. For instance, consumer spending was described as "sluggish" last month, although retailers still expect sales to improve in coming months. Residential construction has softened and home sales "were flat or lower on a year-over-year basis." And in some areas, commercial construction has slowed as well. "Manufacturing activity remained generally strong, although there were reports of moderation in some districts," the summary said.
© 2000 The Washington Post Company <<< |
