The economy may have slumped its way into 2014, but the Federal Reserve's latest economic snapshot shows that all 12 Fed districts are now reporting growth.
The central bank's Beige Book survey, prepared for the policy-setting session at month's end, finds moderate economic growth in the New York, Dallas, Chicago, Minneapolis and San Francisco districts. Other districts are seeing something less, or expansion described as "modest." Growth is described as slower around Boston and Richmond. Even so, most Fed districts are said to be "optimistic about the outlook for growth" as consumers spend more, particularly at the nation's car lots.
Here are some Beige Book highlights:
- All 12 districts have seen slight to moderate job growth since the previous Beige Book, released six weeks earlier.
- Wage pressures have been modest outside of skilled positions, where demand for workers has been strongest. For example, Dallas has experienced the strongest pressure on wages in the energy and construction industries. Generally, wage gains have been lackluster since the recovery began five years ago, as many Americans are aware.
- Car sales remain stronger than other retail sales. The report says Richmond, Atlanta and San Francisco report "robust to very strong auto sales." (Of course, only the Fed knows for sure what the difference is between "robust" and "very strong.")
- Commercial and residential real estate reports are described as "varied across the districts." Home sales have been falling behind year-ago levels in the New York, Boston and St. Louis regions. On the other hand, commercial construction has generally been improving, helped by "higher demand and low vacancy rates."
The Federal Open Market Committee, the central bank's monetary policy panel, meets July 29-30.
The findings in the survey are consistent with the comments of Fed Chair Janet Yellen, who wrapped up two days of testimony before Senate and House panels.
"It confirms a lot of the data," says Scott Brown, chief economist with Raymond James & Associates. "You're seeing clear evidence of a rebound, but it's not anything especially strong."
Speaking before lawmakers, Yellen acknowledged that most members of the FOMC expect the first increase in the Fed's key interest rate -- the federal funds rate -- to come next year, depending on how the economic data looks between now and then. She also told lawmakers that slack in the job market will likely dictate a go-slow approach to rate increases, perhaps for years to come.
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