The nation's economy expanded moderately in all 12 Federal Reserve bank districts in March, but higher payroll taxes and gasoline prices, federal spending cuts and colder-than-usual weather crimped activity in several regions, the Fed said Wednesday.
Overall, though, the Fed's so-called beige book report portrayed a more
resilient economy than indicated by recent economic reports. The housing market
"improved markedly" in most areas. Retail sales increased across most of the
country, and hiring picked up broadly.
In many areas, however, defense-related furloughs and layoffs dampened
manufacturing.
Activity grew moderately in the Cleveland, Richmond, St. Louis, Minneapolis and
Kansas City districts. Modest growth was reported in the Boston, Philadelphia,
Atlanta, Chicago and San Francisco areas. The New York and Dallas regions
expanded slightly.
The beige book, which covered the period from late February through early April,
provides an anecdotal snapshot of the economy, rather than the hard data of
economic reports.
Modest to moderate gains in retail were broad-based, with sales increasing in
the New York, Philadelphia, Cleveland, St. Louis, Minneapolis, Kansas City,
Dallas and San Francisco Federal Reserve bank regions.
Apparel sales rose in the Cleveland, Boston and San Francisco districts.
Furniture and appliance stores were buoyed by housing sales in Chicago. The auto
market continued to surge, though used car sales fell in the New York and
Cleveland areas.
Some regions, however, reported that activity was hampered by higher gasoline
prices and the expiration of a payroll tax cut in January, along with cold
weather. Some car dealers in Cleveland voiced concern about the effect of
across-the-board federal cuts.
Tourism also picked up, as business travel led gains in the Boston, Atlanta and
Minneapolis regions. Hotels in Manhattan, Hawaii and Kansas City reported solid
increases in occupancy. But restaurants and museums in the Boston area said poor
weather hindered sales.
Manufacturing also held steady or increased in most areas, driven by the
improving housing market and rising auto sales. A sawmill in Montana started
production after being closed for more than four years. The auto industry fueled
growth in the Philadelphia, Cleveland, Chicago, St. Louis and Minneapolis areas.
But defense-related cuts led to layoffs, furloughs and closures at some
facilities in San Francisco. Military customers in Chicago were tightening their
belts in advance of anticipated cuts.
Meanwhile, the real estate market continued to strengthen. It picked up in most
districts, with New York, Atlanta and Dallas noting especially strong gains. Low
housing inventories hurt sales in Boston, and sharply pushed up prices in
Richmond, Atlanta, Minneapolis, Kansas City, Dallas and San Francisco.
Job growth "remained unchanged or improved slightly," the Fed said.
Other official reports showed the economy weakening in March as job gains fell
to 88,000 from 268,000 in February.
Tourism picked up in March, the beige book reported.
