The U.S. economy expanded at a modest to moderate pace from mid-February through late March, but local industries remain concerned about high gas prices in coming months, the U.S. Federal Reserve said Wednesday in its new Beige Book.
The Beige Book, issued by the central bank eight times a year and released two weeks before the bank's Federal Open Market Committee meets, is a compilation of anecdotal reports on economic conditions in each of the Fed's 12 districts.
Manufacturing expanded in most districts, particularly in automobiles and technology industries, the latest report found. But higher input costs tied to rising gasoline prices were a concern in over half the districts surveyed.
Professional business services had modest to strong growth. Retail spending was up, with Boston, Philadelphia, Cleveland, Richmond and Chicago citing warm weather as a positive factor, and home improvement supply sales rising in Richmond and Chicago.
Boston, Atlanta, St. Louis and Kansas City had a positive outlook for near-term retail spending, but Philadelphia, Cleveland, Atlanta, Chicago and Kansas City said increased gasoline prices could cut into discretionary spending in coming months.
New vehicle sales rose in most areas, again thanks to warm weather, but were weaker in New York and Minneapolis. Rising gas costs encouraged more customers to buy fuel-efficient cars in Kansas City, Dallas and San Francisco.
Tourism rose, particularly along the east coast, but surveys from the Boston and Atlanta districts reflected concern that fuel prices were dragging down leisure spending.
Residential real estate construction improved in most areas, with multifamily rental housing leading the way. Energy and technology drove commercial construction in Dallas and San Francscio.
Banking conditions remained stable in most areas, with improved loan demand and a modest increase in consumer lending in some districts.
Hiring was steady in most districts, with job growth in manufacturing, freight transportation, professional services and information technology. Wage pressures were contained or modest among respondents. Price inflation was modest, but fuel prices escalated costs in Cleveland, Richmond, Atlanta, Chicago, Kansas City and Dalas. Airlines, land and ocean shippers have raised costs as a result/