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US Economic Growth Goes Sluggish to Modest in February
A majority of Federal Reserve Districts in the United States reported sluggish to modest economic growth in February, while others indicated mixed conditions, according to the Beige Book released by the Federal Reserve on Wednesday.
The Beige Book said that business growth was listed by the Districts of Boston, New York, Richmond, Atlanta, Kansas City, Dallas, and San Francisco, while economic conditions were mixed in the Districts of Philadelphia, Cleveland, Chicago, and Minneapolis. St. Louis reported slower economic activity, it added.
Consumer spending climbed up slightly in most Districts in January and February as retailers offered sharp discounts on winter merchandise, said the Beige Book, which summarized information collected from businesses and other contacts outside the Federal Reserve before February 26.
Automobile sales were generally steady in the same period, but lagged behind last year's rate, it said.
The document indicated that manufacturing activity continued to decline in most of the nation, although in the Boston and Richmond Districts manufacturers reported improvement.
Commercial real estate activity eased in most of the Districts but vacancy rates remained steady and rents have been level or rising. Home building activity grew somewhat in New York, Richmond, Atlanta, Chicago, and Minneapolis, but fell in St. Louis, mainly because of bad weather.
Low grain prices and high costs for farm inputs, such as fertilizers and pesticides, have negatively affected farm finances in the major agricultural regions of the country, and dry weather also worsened farm conditions in the Richmond and Dallas Districts, the document said.
Oil and gas drillings have gone up due to higher prices, but mining activity has been cut back in response to slackening demand for mine output. Minneapolis reported recent and prospective reductions in output of lead, aluminum, copper, and iron.
Bank lending, other than residential mortgage refinancing, was lackluster in most Districts, and banks in some regions have tightened credit standards, according to the Beige Book.
Labor markets, although remaining tight, showed some signs of easing in over half of the Federal Reserve Districts -- Boston, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City and San Francisco, the Beige Book reported.
Demand for manufacturing workers was declining, and demands for construction workers and information technology workers softened, while demand was still strong for clerical workers in a variety of industries and for health care workers.
The document said that employers felt some easing in wage pressures, but they saw increases in health benefit costs. Higher cost for energy, especially natural gas, were noted in nearly all Districts, but price pressures for many other products showed little sign of increase.
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