*DJ Fed Beige Bk:Econ Grew In 11 Of 12 Regions Late-Jul, Aug
*DJ Beige Bk: Except Energy, Consumer Price Increases Modest
*DJ Beige Bk:Housing Still Strong But Shows Signs Of Cooling
*DJ Beige Bk:Labor Markets Tighten;Wage Growth Mostly Modest
*DJ Beige Bk:Mfg Up In 10 Regions, Mixed In Boston,St. Louis
*DJ Beige Bk: Mfg Sector Cites Higher Energy, Material Costs
*DJ Beige Bk:Retail Sales Grow In Most Regions;Auto Sales Up
*DJ Beige Bk: Business Loan Demand Strong; Residential Mixed
*DJ Beige Bk Based Mainly On Data Before Hurricane Katrina
DJ Fed Beige Bk:Econ Grew In 11 Of 12 Regions Late-Jul, Aug
WASHINGTON (Dow Jones)--The U.S. economy kept growing from mid-July through August in 11 of 12 regions, according to a Federal Reserve survey based largely on data collected before Hurricane Katrina ravaged the Gulf Coast.
Regionally, the Boston district was the only exception, showing mixed economic activity, according to the Fed's latest Beige Book report, released Wednesday. However, the Atlanta district, which includes much of the Gulf Coast, noted Katrina had halted oil and gas output in late August, and it said unemployment claims in Louisiana and Mississippi were expected to rise "significantly."
Nationally, growth was widespread in sectors including retail sales, services, finance, construction, manufacturing, mining and energy, the Beige Book report says.
"A few districts reported softening in residential real estate markets, albeit from still brisk levels of activity, while commercial real estate markets strengthened in most districts," according to the report, which was prepared by the Minneapolis Fed.
Except for energy prices, overall consumer price increases were "modest," the report says. "Higher energy costs were reported by almost all districts, and energy intensive industries were able to pass some of these costs on to consumers in the Atlanta, Boston, Cleveland, Chicago, Kansas City, Minneapolis, Philadelphia and San Francisco districts," it says.
DJ Fed Beige Bk:Econ Grew In 11 Of 12 Regions Late-Jul,Aug-2
Labor markets showed signs of tightening, but wage growth was modest. The Atlanta, Boston, Dallas, Kansas City and Richmond districts reported some firms had trouble finding qualified workers in sectors such as healthcare, accounting, information technology, trucking, energy and construction.
Retail sales grew in most regions, but they were about even in the New York and Philadelphia regions, mixed in the Dallas region and weak in the Cleveland region, the Fed report says. "Several districts reported that retailers expect sales to be negatively affected by higher fuel prices," it says.
Auto sales were up in all districts. Most regions cited the effect of automaker discounts, although Chicago and Dallas reported slower August sales as "buyer fatigue" set in.
In the Richmond district, auto sector contacts said sharply higher energy prices were beginning to affect buyers, through weaker demand or avoidance of gas guzzlers. One dealer in the Richmond district said he had sold sport-utility vehicles recently to customers who exchanged them within a few days for smaller, more fuel-efficient vehicles.
Manufacturing grew in 10 of the 12 regions, but it was mixed in Boston and St. Louis.
"Nearly all districts noted increased activity across a broad range of industry sectors," the report says, citing strong output of construction-related products in the Atlanta, Chicago and Dallas regions and strong semiconductor demand in the San Francisco region.
"Rising material and energy costs were a common theme across most of the nation," it says.
DJ Fed Beige Bk:Econ Grew In 11 Of 12 Regions Late-Jul,Aug-3
Most regions reported increased lending activity. Demand for business loans was seen as strong, while residential lending activity was mixed.
The Fed reported "signs of softening" in some residential real estate markets. While the Dallas, St. Louis and San Francisco regions reported increased activity, the Kansas City, New York, Philadelphia and Richmond regions said "signs of cooling were evident" amid strong sales. The Atlanta district reported demand was starting to soften in Florida, though sales were still above last year's levels.
Residential building, while still strong, was down from last year in the New York, Chicago, Cleveland, Kansas City and Minneapolis regions. The St. Louis district said home building was lagging.
Commercial real estate markets were strong in the New York and San Francisco districts. Business construction grew in the Cleveland, Dallas, Minneapolis and St. Louis districts, but it was mostly flat in the Boston, Philadelphia and Chicago regions.
Energy and mining sectors remained strong, with energy services firms in several districts reporting rapidly growing backlogs. "Minneapolis reported full production at mines and active interest in starting new operations," the report says.
Overall agriculture conditions improved through most of the country, with several districts saying August rains had reduced drought damage.
Tourism grew in most regions. "Several districts noted that bookings were up and that activity was expected to increase for the remainder of the season," the report says.
-By Campion Walsh and Deborah Lagomarsino; Dow Jones Newswires; 202 862 9249; campion.walsh@dowjones.com
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