WASHINGTON — Apparently undaunted by higher gasoline prices, consumers continued to spend in June and early July and the economy is growing without inflation, according to a Federal Reserve Board survey released Wednesday.
The so-called Beige Book, which intended to provide a reading on the overall economy with anecdotal evidence from the Fed’s 12 districts, helped propel gains in U.S. stocks. The Dow Jones Industrial Average went up 0.5 percent to 10,637 and the Standard & Poor’s 500 increased 0.5 percent to 1,236, its highest point in four years.
Retail sales rose in most regions of the country and future expectations were generally positive. Stores in the Cleveland and Chicago districts appeared to benefit from warmer weather, while retailers in the Philadelphia, Richmond and San Francisco regions also registered sales increases.
The Minneapolis region showed broad-based growth, with one North Dakota mall manager reporting a 5 to 10 percent sales bump in June and a “huge” first week of July. Sales were described as “outstanding” at a mall in Montana.
The signs of consumers’ willingness to approach the cash register bears out a recent Commerce Department report that showed a 7.6 percent year-over-year sales rise at apparel and accessories stores in June to $16.78 billion.
The good vibes were not universal, though, as Boston and New York area retailers saw some softening.
In the New York area, higher-end apparel and jewelry showed strength that was offset by weaker sales of home goods. Overall, June sales in New York were on or above plan, with hot weather helping sales of summer fashions, but early July results tapered off.
Some Philadelphia area merchants said shoppers had cut back on some impulse buying and were making fewer trips to stores to keep gasoline expenses in check. Several retail executives said increased operating costs had them concentrating on growing sales rather than opening new doors.
In other areas of Wednesday’s report, demand for labor continued to increase, tourism strengthened and manufacturing activity expanded, though textiles producers, which have been battling increased imports from China, continued to report hard times.
This story first appeared in the July 28, 2005 issue of WWD. Subscribe Today.