In Survey, Fed Finds Economic Growth Is Widespread

The survey noted that 10 of the Fed’s 12 banking districts reported moderate growth, while the Boston and Chicago districts reported slow growth. The survey, called the beige book, provided anecdotal information on economic conditions through Feb. 22.

The information will be discussed along with other economic data during the Fed’s next policy meeting on March 19 and 20Consumer spending increased in most regions, but much of the gains were driven by auto sales.

Many districts said consumers spent slightly less after taxes rose and gas prices increased. Some districts also expressed concern about federal spending cuts that started March 1.

Housing markets showed increased strength in nearly all of the country. Manufacturing grew modestly in most districts after struggling through most of 2012. Many districts reported improvement in individual job markets.

Analysts said the survey was slightly more upbeat than the previous one by the Fed, noting the modest rebound in manufacturing in the last two months. Jennifer Lee, senior economist at BMO Capital Markets, said the latest survey was “more encouraging news on the U.S. economy.”

Many economists believe the Fed will maintain its low-interest-rate policies at current levels, taking no new steps at the March meeting.

In January, the Fed stood behind aggressive steps it introduced in December to try to lower unemployment. It repeated its intention to keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. The Fed also said it would keep buying Treasuries and mortgage bonds to help lower borrowing costs and encourage spending.

When the Fed last met in January, the unemployment rate was 7.9 percent. The government will report on February’s unemployment figures on Friday, and some economists are forecasting that the jobless rate will decline to 7.8 percent, with the economy adding 152,000 jobs.

The payroll processor A.D.P. said Wednesday that American businesses added 198,000 jobs in February. The private survey also revised January’s hiring figures to show that companies added 215,000 jobs that month, 23,000 more than what had initially been reported.

That suggests the government’s February unemployment report could come in above economists’ forecasts.

In another positive economic sign, orders for machinery and other factory goods that signal business investment surged in January.

Orders for so-called core capital goods, which also include equipment and computers, rose 7.2 percent from December, the Commerce Department reported Wednesday. It was the largest gain in more than a year and higher than the initial 6.3 percent increase estimated by the government last week.

Total factory orders fell 2 percent in January compared with December. But the decline was mostly a result of a steep drop in aircraft and military orders.

Demand for durable goods, items expected to last at least three years, dropped 4.9 percent. Demand for nondurable goods, such as chemicals and paper, rose 0.6 percent.

Article source: http://www.nytimes.com/2013/03/07/business/economy/in-survey-fed-finds-economic-growth-is-widespread.html?partner=rss&emc=rss