A Federal Reserve survey says economic growth increased throughout the United States from April through late May, fueled by home construction, consumer spending and steady hiring.
Eleven of the Fed’s banking districts reported “modest to moderate” economic growth, according to the Beige Book survey released Wednesday. The 12th, in Dallas, reported strong growth.
The survey is based on anecdotal reports. The mostly favorable results of the survey suggest that the economy and the job market are improving despite tax increases and government spending cuts that took effect this year.
But the modest or moderate improvement reported for most regions appears to fall short of the strong and sustained growth several Fed members have said is needed before the Fed can start tapering its bond purchases. Those purchases have helped keep interest rates at record lows.
Manufacturing activity expanded in 10 districts, the survey noted, but there were concerns that government spending cuts might slow factory activity, particularly in defense industries.
Hiring was described as rising at a “measured pace,” with a few districts reporting pockets of stronger activity.
The Fed has been assessing the job market’s health in considering when to start scaling back its support for the economy, including $85 billion-a-month in Treasury and mortgage bond purchases. The information from the latest Beige Book will be discussed along with other economic data at the Fed’s policy meeting June 18 and 19.
— Associated Press
A private survey shows that U.S. businesses added just 135,000 jobs in May, the second straight month of weak gains.
Payroll provider ADP said Wednesday that May’s gain was above April’s revised total of 113,000. But it’s much lower than the gains ADP reported over the winter, which averaged more than 200,000 a month from November through February.
Mark Zandi, chief economist at Moody’s Analytics, blamed the weakness on higher taxes and steep government spending cuts enacted this year.
The ADP survey is derived from payroll data and tracks private employment. It has diverged at times from the government’s more comprehensive monthly jobs report, which will be released Friday. In April, the government said private employers added 176,000 jobs, much higher than the ADP’s estimate.
Economists say the gap between the ADP’s survey and the government figures has narrowed since Moody’s Analytics began compiling the numbers eight months ago. Still, it has differed from the Labor Department’s report by about 40,000 a month since then.
Economists forecast that the government’s report will show employers added 170,000 jobs in May, according to a survey by FactSet. The unemployment rate is expected to stay at a four-year low of 7.5 percent.
The ADP report found that manufacturing companies cut 6,000 jobs last month. Construction firms added 5,000, below the previous month’s 15,000 gain.
— Associated Press
l Jefferson County, Ala., reached an agreement to pay its largest creditors $1.84 billion, or 60 percent of what they’re owed, as part of a plan to end the biggest U.S. municipal bankruptcy by the end of the year. JPMorgan Chase, seven hedge funds and a group of bond insurers agreed to the deal, Kenneth Klee, an attorney for Jefferson County, said Wednesday at a county commission meeting in Birmingham. Together, those parties hold about $2.4 billion, or about 78 percent, of the county’s sewer debt.
l Toyota said Wednesday that it is recalling about 242,000 of its Prius and Lexus hybrid vehicles because of problems with their braking systems. The recall applies to about 233,000 Prius vehicles made between March and October 2009 and about 9,000 Lexus HS 250h models made between June and October 2009.
l The newest BlackBerrys with physical keyboards are now available in the United States, months after the touch-screen versions went on sale. On Wednesday, T-Mobile USA began selling the Q10, which has the new BlackBerry 10 operating system. Verizon, AT&T and Sprint also have plans to sell it.
l The U.S. government plans to sell an additional 30 million shares of General Motors stock in a public offering Thursday as it speeds efforts to divest itself of a stake in the auto giant it got in a bailout four years ago. The Treasury Department will set the price for the shares after the markets close Thursday, with the sale taking place shortly thereafter. A United Auto Workers retiree health-care trust fund will join the sale and sell 20 million shares, pushing the size of the offering to 50 million shares.
— From news services
l 8:30 a.m.: Weekly jobless claims released.
l 10 a.m.: Weekly mortgage rates released.