Read it and reap or weep. The past is dead, let the dead bury the past. You can't change the past, but you can take positive steps to build a better financial future today. Look forward. Lead, follow, or get out of the way or take shelter and live in bunker mentality. From my rose colored glasses perspective, the end of the world is not yet nigh...
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Federal Reserve Says Economy Showing `Signs of Improvement'
from Bloomberg
By Simon Kennedy
Washington, March 6 (Bloomberg) -- The U.S. economy showed signs earlier this year of recovering from a recession that began last March, the Federal Reserve said in its latest survey of regional economic activity.
``A majority of districts report some signs of improvement in economic conditions in January and early February,'' according to the report, commonly known as the beige book for the color of its cover.
Of the Fed's twelve district banks, those monitoring the Boston, Philadelphia, Richmond, Atlanta and Minneapolis regions witnessed ``some pickup in activity.'' While others reported a ``mixed'' performance, only Dallas saw ``continued weak activity,'' the report said.
Retailers were enjoying ``modest improvements'' in sales in most districts compared with the end of last year, it said. Home furnishing and appliance purchases were ``growing strongly'' in several regions and motor vehicle sales remained ``solid.''
The Fed said manufacturing remained ``generally weak,'' though higher demand and reductions in inventories had led to a pickup in the production of automakers and high-tech companies.
Service industries were ``mostly sluggish or flat'' in recent months, though selected industries logged improvements, the report said. Boston noted rising demand for software products and related services, Cleveland witnessed ``significant numbers'' of trucking and shipping companies recording improvement and demand for communication improved in San Francisco.
Labor markets continued ``to be slack in most districts'' with many firms suspending bonuses, freezing wages or skipping annual salary increases, the report said. Employment of temporary workers remained ``slack,'' although the ``worst seems to be over,'' the Fed said.
The Fed also said, ``wage and price pressures in the retail sector are virtually nonexistent.'' Demand for commercial and consumer loans has been ``mixed.''
After slipping into recession last March and contracting at an annual rate of 1.3 percent in the third quarter, the economy expanded 1.4 percent in the final three months of the year, leading some economists to predict the Fed will raise interest rates later this year.
The beige book was compiled by the Fed Bank of Boston and was based on information collected before Feb. 26. The report -- a collection of anecdotes reported to the regional Fed banks from local businesses -- gives central bankers an idea of economic development beyond what statistics show.
The central bank's rate-setting Open Market Committee next meets March 19. At the last meeting, Jan. 30, central bankers left their benchmark overnight bank lending rate at 1.75 percent. That was the first time in year they had not changed it as they said the economy was beginning to recover from recession.
No economist among the 53 surveyed by Bloomberg News anticipates a change in rates at the forthcoming meeting. Beyond March, there are a growing number of economists who expect an increase later this year. A majority of the economists at the 24 so-called primary dealers predict the central bank will increase its key interest rate to between 2.5 percent and 3.75 percent by year-end, according to a Bloomberg News survey last week.
In their deliberations, Fed policy makers consult the beige book and other confidential documents on the economy and potential policy actions.
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Best Regards, J.T. |
