The economy continued to expand at a modest to moderate pace from mid-February through late March, the ""Federal Reserve"":http://www.federalreserve.gov/ said Wednesday in its periodic ""Beige Book"":http://www.federalreserve.gov/monetarypolicy/beigebook/default.htm, reporting solid and faster growth in Kansas City and Minneapolis, but Ã¢â‚¬Å“moderateÃ¢â‚¬Â or Ã¢â‚¬Å“modestÃ¢â‚¬Â growth in Boston, Atlanta, Chicago, Dallas, San Francisco, Cleveland, and St. Louis.
New York reported economic growth picked up somewhat while Philadelphia and Richmond cited improving business conditions.[IMAGE]
The Beige Book report was based on information collected through April, before the release of the Employment Situation report which showed the economy added a disappointing 120,000 jobs in March.
Though followed closely by economists and the media, the Beige Book Ã¢â‚¬" issued two weeks in advance of a meeting of the Federal Open Market Committee Ã¢â‚¬" is rarely cited in the minutes of the Committee meetings. That said, as an Ã¢â‚¬Å“anecdotalÃ¢â‚¬Â report, it often precedes confirming data and is sometimes considered Ã¢â‚¬Å“anecdatal.Ã¢â‚¬Â
Residential real estate activity, the Beige Book said, Ã¢â‚¬Å“improved in most Federal Reserve districts, though Cleveland and San Francisco noted that activity remained lackluster or at low levels.Ã¢â‚¬Â
The St. Louis and Minneapolis Districts reported increases in building permits. Multi-family construction, including apartments and senior housing, expanded in many districts, the Federal Reserve reported.
Home prices, the report said, Ã¢â‚¬Å“continued to decline in Boston, New York, and Minneapolis, but were largely flat in San Francisco.Ã¢â‚¬Â The Beige Book said mild weather helped real estate activity in Boston, Philadelphia, and Kansas City.
The Beige Book said non-residential construction activity improved in Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis districts, though the improvement was described as Ã¢â‚¬Å“slow.Ã¢â‚¬Â Non-residential real estate activity was reported Ã¢â‚¬Å“unchanged or steadyÃ¢â‚¬Â in Boston, New York, and San Francisco.
San Francisco, the report said, noted a rise in the demand for office space from the technology sector while Cleveland and Chicago saw an increase in healthcare-related construction.
The education sector added to projects in Boston, Cleveland, Philadelphia, and Richmond. In general, the report said, buildersÃ¢â‚¬â„¢ attitudes were described as Ã¢â‚¬Å“positive or slowly improvingÃ¢â‚¬Â in Philadelphia, Cleveland, Atlanta, and Kansas City Districts, and as Ã¢â‚¬Å“cautiously optimisticÃ¢â‚¬Â in Boston.
Banking conditions remained stable, the Beige Book said, with modest improvements in demand for lending. Loan demand was reported Ã¢â‚¬Å“improved in New York, Philadelphia, Cleveland, Richmond, Chicago, Kansas City, Dallas, and San Francisco, while lending activity was unchanged in St Louis.Ã¢â‚¬Â[COLUMN_BREAK]
Cleveland, Richmond, and San Francisco reported Ã¢â‚¬Å“increased competition among lenders has been driving more aggressive loan pricing.Ã¢â‚¬Â
Demand for commercial and industrial loans remained steady, the report said, while several districts reported an increase in commercial real estate lending activity.
Philadelphia and Cleveland, the Beige Book said, reported increased lending for multifamily housing and health care. The Cleveland and Richmond districts reported increased home equity and auto lending, while bankers in Chicago noted improved credit availability for auto loans and credit cards.
Several districts, according to the Beige Book, Ã¢â‚¬Å“reported increased credit quality, as delinquencies have continued to decline and few problem loans have been reported.Ã¢â‚¬Â
Reports on retail spending Ã¢â‚¬" which represents more than two-third of the economy, were positive, the Beige Book said, Ã¢â‚¬Å“with the unusually warm weatherÃ¢â‚¬Â credited for boosting sales in several districts.
Ã¢â‚¬Å“While the near-term outlook for household spending was encouraging,Ã¢â‚¬Â the Beige Book said, Ã¢â‚¬Å“contacts in several districts expressed concerns that rising gas prices could limit discretionary spending in the months to come.Ã¢â‚¬Â
Hiring, according to the Beige Book, Ã¢â‚¬Å“was steady or showed a modest increase in Boston, New York, Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco.Ã¢â‚¬Â
The Fed report noted the Richmond and Atlanta districts suggested a ""preference for part-time and temporary workers.Ã¢â‚¬Â Atlanta noted Ã¢â‚¬Å“temporary workers were being utilized in order to contain costs and retain flexibility, while some employers in Richmond prefer temporary workers due to uncertainty about future demand.Ã¢â‚¬Â
At the same time, the Beige Book said, Ã¢â‚¬Å“some employers in the Boston, Cleveland, Atlanta, Chicago, Kansas City, and Dallas districts reported having difficulty finding qualified workers, especially for certain high-skilled positions.Ã¢â‚¬Â
The Beige Book said the New York district reported Ã¢â‚¬Å“employers are planning to step up hiring activity in the months aheadÃ¢â‚¬Â while the Boston, Richmond, and Atlanta districts said ""employers in their districts are cautious and need to see more robust growth before they expand their permanent payrolls further.""
Wage pressures were described as Ã¢â‚¬Å“contained or modestÃ¢â‚¬Â with some upward pressure on wages in Chicago, Dallas, and San Francisco for skilled jobs, especially in manufacturing and information technology.
Overall price inflation was modest in most Districts, the Beige Book said.
The Beige Book is often cloaked in secrecy. The district reports are sent to one of the banks to prepare the national summary. The identity of District bank which prepares the summary is closely guarded.
This report was prepared by the Cleveland Federal Reserve Bank which last wrote the summary in December 2010 when it reported Ã¢â‚¬Å“the economy continued to improve, on balance, during the reporting period from early/mid-October to mid-November Ã¢â‚¬Â The nationÃ¢â‚¬â„¢s economy swooned shortly after that report was issued.
The Federal Open Market Committee is scheduled to meet April 24-25 to review monetary policy.