WASHINGTON (6/6/13)--The 12 district banks that comprise the U.S. Federal Reserve System reported, with one exception, that "overall economic activity increased at a modest to moderate pace" from early April to late May. The exception was the Dallas District, which reported strong economic growth for the period. The information is in the Fed's Beige Book released Wednesday.
The newest report compares with "moderate" growth the Beige Book reported for late February to early April. The report, prepared by the Federal Reserve Bank of Minnesota, describes current economic conditions in each district.
Officials at the Fed will consider the report as they continue consider when to begin reducing the pace of bond purchases (Bloomberg.com June 5). Officials meet June 18-19 and are deciding whether gains in employment are significant enough to merit a reduction in stimulus, and how much the world's biggest economy is being constrained by federal budget cuts, said Bloomberg.
Although most analysts think the economic recovery is picking up steam, they anticipate it will temporarily settle down in the next few months because a package of government spending cuts--known as the sequester--will bog down output (The Wall Street Journal June 5).
Gross-domestic-product growth is slowing in the second quarter, some recent data indicate, after expanding by a 2.4% seasonally adjusted annual rate in the first quarter, the Journal added.
Most districts reported slight to moderate pick-ups in consumer spending and a moderate rise in vehicle sales. In all 12 districts, construction and residential real estate activity rose at a moderate to strong pace.
Since the last Beige Book, overall lending at financial institutions modestly increased. Credit quality and deposits rose, while credit standards remained largely unchanged.
"Hiring increased at a measured pace in several districts, with some contacts noting difficulty finding qualified workers," said the Beige Book. "Wage pressures remained contained overall, although several districts reported a modest or moderate rise for selected occupations. Districts reported level prices to mild price increases; some manufacturers raised prices and some increases for input prices were noted."
The Dallas District reported strong growth in auto lending and residential markets, with ongoing weakness in corporate transactions. The New York District saw rising demand for all types of loans except commercial and industrial loans--for which demand was unchanged.