WASHINGTON — A Federal Reserve report issued Wednesday added another sign that the economy is back in the pink and emphasized that “improvements appeared to be reasonably broadly based.”
The Beige Book, the Fed’s periodic snapshot of national economic activity based on anecdotal reports from its 12 regional banks, was particularly upbeat in its latest survey, which covered October and early November.
Retailers in large swaths of the country reported steady consumer spending during the period. However, there were weak patches — New York, Chicago, Atlanta and Philadelphia —where retailers reported sales, “particularly apparel,” were dampened by unseasonably warm weather, the Fed said.
Specifically in New York, “retailers report that selling prices are steady to down 3 percent from a year ago. In looking ahead to the upcoming holiday season, retailers are generally planning for sales to be flat to up modestly over comparable 2002 levels.”
Bright spots for retail sales in early fall were found in Boston, Atlanta, St. Louis, Minneapolis and Kansas City, which “indicated that sales exceeded year-ago levels.” The San Francisco Fed, which covers the West Coast, reported “solid” sales, as demand for software and professional services “stabilized after months of contraction,” the Fed said. Discounting was noted in Atlanta and San Francisco, as well.
In addition, “most districts said that inventories were well positioned, with many retailers keeping stocks lean,” the Fed said.
The Fed report came as the federal government revised the third-quarter Gross Domestic Product upward to 8.2 percent from a robust 7.2 percent, as other reports pointed to strong corporate profits, business investment and consumer confidence.
Economists widely expect the pace of economic activity to slow during the fourth quarter and into next year, and retailers told the Fed they’re upbeat about ending the year on a strong note.
“Discussions of retailers’ expectations for the holidays were generally positive,” the Fed said.
Retailers in New York and Minneapolis said they expect to hire seasonal workers at the same level as last year, and stores in Kansas City said they plan “to raise seasonal hiring.” Overall, the Fed said “labor market conditions generally stabilized after an extended period of weakness.”Residential real estate markets, including new construction, continued to be an economic standout, while commercial real estate vacancy rates “remained at high levels across most markets.”
A weak link, manufacturing, showed scattered improvements across the country, but “factory employment growth remained weak” in most districts. High tech product makers offered “positive reports.”
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