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Bad Weather and War ‘Subdue’ Consumers

WASHINGTON — War with Iraq and inclement weather in the U.S. converged to create lackluster economic activity in March and early April as overall consumer spending remained "subdued," the Federal Reserve Board said Wednesday.<br><br>Although...

WASHINGTON — War with Iraq and inclement weather in the U.S. converged to create lackluster economic activity in March and early April as overall consumer spending remained “subdued,” the Federal Reserve Board said Wednesday.

Although Richmond, Va., reported continued modest growth, reports from Boston, Cleveland, Atlanta, St. Louis, Dallas and San Francisco said economic conditions were still “mixed or soft,” according to the Board’s Beige Book report, a survey of business executives in 12 designated districts.

New York, Philadelphia, Chicago, Minneapolis and Kansas City all reported the recent pace of economic activity had been slower than the month before.

In most districts, the decline in sales also was attributed to the shift of the Easter shopping season from March to April this year.

Apparel sales in the Boston district were weak, though gift items sold better than other merchandise, the Beige Book said.

Retailers in the New York district reported that apparel sales “continued to be sluggish in terms of unit volume and especially dollar volume,” according to the Fed.

Sales of home furnishings in New York, however, held up relatively well compared with other categories.

Unseasonably cold and wet weather and war jitters had a negative effect.

Department stores and shopping centers reported weaker same-store sales and traffic in March and early April.

Most executives said sales dropped dramatically in the first few days of the war with Iraq, but rebounded slowly after the onset of the war.

“Among product categories, apparel sales appeared to be weakest [in Kansas City],” according to the Beige Book.

In the Dallas district, women’s apparel sales were “particularly weak,” the Fed said.