Your Economy (No Politics)

[Bullwinkle]

Fed reports moderate growth, ´less intense´ inflation -
Wednesday, January 18, 2006 7:38:37 PM
http://www.afxpress.com


WASHINGTON (AFX) -- The nation's economy continued to expand at a moderate pace in most regions in the past six weeks while consumer prices were said to be rising only moderately, the Federal Reserve reported Wednesday

In its periodic Beige Book report on current economic conditions, the Fed said inflationary pressures "were less intense at year-end than earlier." "Moderate" was the operative adjective used in the Fed's anecdotal account of the economy. Employment growth was said to be moderate. Wage increases were said to be moderate. Consumer spending was moderate in five of the 12 Fed banking districts, with stronger activity reported in six others

Similarly, tost regions reported a moderation in residential real-estate markets, the Fed said

Increases in manufacturing activity were widely reported. Retail sales increased in most regions but were disappointing in the Cleveland region. Consumer borrowing was flat or falling, while most regions reported "some cooling" in housing markets

The Beige Book was prepared by the professional staff at the Cleveland Fed based on thousands of reports from business contacts through Jan. 9. The report will help guide, but not determine, deliberations over U.S. monetary policy at the Federal Open Market Committee's Jan. 31 meeting

The FOMC is expected to raise interest rates for what would be a 14th consecutive meeting at the end of the month, and perhaps again on March 28. The Fed has been seeking a moderation in growth that would translate into reduced inflationary pressures

Four of the 12 Fed districts -- San Francisco, Richmond, Atlanta and Dallas -- reported an accelerating economy. Six others -- New York, Philadelphia, Chicago, St. Louis, Minneapolis and Kansas City -- said the economy was expanding moderately. Growth was more tepid in the Boston and Cleveland regions

Most districts reported an easing in energy prices, which was associated with a general decline in price pressures in the San Francisco, Cleveland and Richmond regions

The other nine regions reported continued pressure from nonlabor input costs. While some producers were attempting to recoup those rising costs, sources in four of the regions reported that "intense competition" was keeping price increases down

The latest Beige Book's snapshot descriptions by region:
Boston: Business activity continued to expand, although it wasn't generally translating into job gains. Businesses expect "more of the same" growth in 2006. New York: The economy continued to expand at a moderate pace, although there were some signs of softness in housing. Philadelphia: The economy expanded moderately. Businesses expect shipments and new orders to expand at the current pace in 2006. Cleveland: Business conditions remained reasonably strong, but business spending outpaced consumer spending, which was weaker than hoped for in the holiday season

Richmond: The economy continued to expand at a solid pace, despite somewhat slower growth in manufacturing and housing. Atlanta: Economic activity continued to expand at a solid pace. Retail sales were positive. Housing moderated while manufacturing expanded. Chicago: Economic activity continued to expand at a moderate pace. Employment expanded further. Residential construction tapered off. St. Louis: The economy expanded modestly. Manufacturing was mixed. Home sales increased

Minneapolis: The economy grew moderately. Consumer spending, manufacturing and commercial real estate expanded. Residential real estate softened

Kansas City: The economy expanded moderately. Consumer spending and manufacturing activity rose at a solid pace. Labor markets firmed further

Dallas: Economic activity accelerated. Energy activity strengthened as the cleanup from recent storms continued. Manufacturing picked up. Real-estate markets improved gradually

San Francisco: The economy continued to expand at a solid pace. Price inflation was modest overall. Retail sales expanded. Manufacturers saw strong demand

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1137613115-f05e0f08-40276


Summary of Commentary on Current Economic Conditions
by Federal Reserve District
http://www.federalreserve.gov/fomc/beigebook/2005/20050119/FullReport.htm