Fed survey: Economic growth picks up in most areas
Wednesday, December 1, 2010; 4:05 PM
WASHINGTON -- The U.S. economy improved this fall as factories produced more goods and shoppers spent more money.
A new survey by the Federal Reserve finds that 10 of the Fed's 12 regions reported economic growth picking up.
Five regions - Boston, Cleveland, Atlanta, Dallas and San Francisco - said growth increased at a "slight to modest" pace. Another five - New York, Richmond, Chicago, Minneapolis and Kansas City - said economic activity was increasing at a "somewhat stronger" pace. Only two regions - Philadelphia and St. Louis - reported business conditions as mixed.
All told, the new survey offered a marginally brighter picture of the economy over the past six weeks.
In the Fed's previous survey, for instance, the regions around Philadelphia, Richmond and Cleveland had reported economic activity as mixed or steady. Atlanta and Dallas regions said growth had slowed.
Stronger production at factories helped propel growth in most parts of the country, the new survey said. Makers of fabricated metals and autos and related goods saw the biggest gains.
Retailers also reported better sales in many regions, the Fed said. However, merchants in the regions of Boston, Cleveland, Richmond and St. Louis said results were mixed. Still, retailers' expectations for holiday sales were mostly positive.
Sales of new cars and light trucks, meanwhile, were largely higher. And tourism improved across the country, the report found.
All of those factors contributed to modest job growth.
"Hiring activity showed some improvement across most districts, although employers are waiting for clearer signals of expanding business prospects before adding significantly to payrolls," the survey found.
The country did see a burst of hiring in October when private employers added 159,000 net jobs. That still wasn't enough to lower the 9.6 percent unemployment rate.
The Fed survey found that companies in the Atlanta and Chicago regions, for instance, showed a preference for part-time and temporary workers. However, employers in the Boston, Richmond and Minneapolis regions reported having difficulty finding skilled workers.
With the goal of invigorating economic growth and lowering unemployment, the Fed on Nov. 3 announced a $600 billion program to buy government bonds over an eight-month period. The Fed hopes that the program will spur more spending by lifting stocks and making loans cheaper.
The Fed meets next on Dec. 14 and will examine what impact the program is having on the economy. The Fed has left the door open to scale back the bond purchases if the economy were to strengthen in the months ahead. Or the Fed could buy more bonds if the economy were to weaken.
The region-by-region survey is based on information collected from the Fed's 12 regional banks on or before Nov. 19. Known as the "Beige Book," the survey provides a more in-the-trenches look at the overall economy than broad statistics.
Despite the improvements at retail stores and at factories, the housing market remained depressed. And four regions - Philadelphia, Atlanta, St. Louis and Minneapolis - said housing activity weakened.