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To: StanX Long who wrote (10762)	7/31/2003 12:52:09 AM
From: StanX Long	Read Replies (1) \| Respond to of 95472

Federal Reserve's Beige Book says economy speeds up "a notch" Wed Jul 30, 6:00 PM ET story.news.yahoo.com WASHINGTON (AFP) - The sluggish, job-scarce US economy sped up "a notch" in the past few weeks, igniting recovery hopes, the Federal Reserve (news - web sites)'s Beige Book survey showed. "Reports from the 12 Federal Reserve districts provided additional signs that the pace of economic activity increased a notch during June and the first half of July," it said. "Consistent with the generally more positive assessments of current economic activity, several districts noted increased optimism about economic prospects in coming months." The Beige Book survey, released eight times a year, added to a crescendo of brightening economic data and predictions of accelerated growth in the second half of this year. Factories, which have shed 2.7 million jobs during a three-year slump, were finally coming out of the doldrums, said the report, summarizing information from the districts of the Federal Reserve System. "Nascent signs of a recovery emerged in the manufacturing sector with 10 of the 12 district reports indicating mixed, steady or slightly improved conditions after an extended period of declines," it said. Housing sales and construction, boosted by low mortgage rates, were "strong," the Federal Reserve said. "In contrast, consumer spending remained lacklustre." The Beige Book survey will be on the table when Federal Reserve chairman Alan Greenspan (news - web sites) and his fellow policymakers next meet to ponder interest rates on August 12. At the last meeting June 25, they trimmed the federal funds interest rate by a quarter percentage point to a 1958 low of 1.00 percent to spark faster activity and stave off a deflation menace. Prices and wage inflation were now "broadly in check," the latest Beige Book report said. Economic data improved in June, with retail sales up 0.5 percent, groundbreaking on new homes surging 3.7 percent and industrial production rising 0.4 percent. President George W. Bush (news - web sites) said the US economy appeared to be picking up speed, and reasserted his faith in massive tax cuts despite a bulging budget deficit. "We are beginning to see hopeful signs of faster growth in the economy, which, over time, will yield new jobs," he told a news conference in the White House Rose Garden. Bush said a 350-billion-dollar tax cut package that became effective July 1 would boost the economy and jobs, rejecting a suggestion that it might be time to pursue a different policy. The Beige Book survey made little mention of the labor market, which traditionally lags behind economic recoveries. The US unemployment rate shot to a nine-year high of 6.4 percent in June, and many analysts expect latest figures, due out Friday, to show the jobless rate rose a little in July. Economic growth figures to be released Thursday are widely expected to show second quarter annualized growth of about 1.5 percent, barely changed from 1.4 percent in the first quarter. But US Treasury Secretary John Snow has forecast growth will pick up to more than three percent in the third quarter of this year, 3.5 percent in the last quarter and four percent in 2004. And most economists agree activity will speed up, some saying the rate may hit five percent in the last quarter, boosted by low interest rates and Bush's tax cut package.