WASHINGTON — Consumer spending moderated in much of the U.S. in June and early July and the strength of retail markets varied from poor to strong, the Federal Reserve reported Wednesday in the Beige Book, an anecdotal snapshot of economic activity.
The Fed said that the economy overall continued to expand, with particular growth seen in manufacturing, but in several regions growth was moderating.
Since spring, the Fed said seven of its 12 district banks cited a “softening” of spending in the bank’s regions anchored by New York, Philadelphia, Cleveland, Atlanta, Chicago, Dallas and San Francisco. Consumer purchases account for two-thirds of U.S. economic activity. The spending downturn in New York, Philadelphia and Cleveland was blamed on cooler weather.
In the remaining Fed districts, Boston reported consumer spending as “mixed,” while in Kansas City it was “largely flat in recent weeks” and Richmond, Va.-area merchants reported overall spending was “flat or was lower.”
In other areas covered by the Richmond bank, “a normally busy Washington beltway anchor store told us mall traffic was down and the manager of a clothing store in central West Virginia said apparel sales were in the doldrums,” the Fed said.
In St. Louis, shoppers showed “strong” spending habits, while in Minneapolis there were “modest” increases, the Fed said.
The strength of retail markets ran the gamut.
“Apparel sold poorly in the Philadelphia, Richmond and Chicago districts, but the Dallas district reported that sales of women’s apparel was strong,” the Fed said. “Home furnishings and home improvement items sold well in the Boston, Chicago and Kansas City districts, but New York noted that these products sold less well…[than] previously.”
In other economic activity, the Fed said manufacturers “continued to report increases in production, continuing the pattern of strong production gains seen throughout the earlier part of 2004.” There were also “scattered” shortages of supplies for manufactured goods, like cement and scrap steel, an indication of improved health in the production sector, the Fed said.
The Fed also reported delivery delays throughout the country because “transportation and shipping services were in high demand.’’