Beige Book: Economy Is Improving
Fed: Nine of 12 regional districts report improved economic activity.
U.S. economic conditions kept improving slightly at the start of 2010, but the blizzards that hit the East Coast in February hurt several areas, the Federal Reserve said in a report Wednesday.
In its latest beige book report, the Fed said nine out of its 12 regional districts reported that economic activity improved, but in most cases the increases were modest, with activity held back by the Feb. 4-7 and Feb. 9-11 snowstorms.
The beige book is a summary of economic activity prepared for use at the U.S. central bank's next policy-setting meeting, March 16. The latest report, prepared by the Federal Reserve Bank of Kansas City, examined economic conditions across the Fed's districts based on information collected on or before Feb. 22.
"Richmond reported that economic activity slackened or remained soft across most sectors, due importantly to especially severe February weather in that region," the report said.
February's severe winter weather is expected to have hurt several sectors of the economy. Analysts believe data Friday will show the U.S. economy continued to shed jobs as unusually violent snow storms walloped the East Coast last month. February retail sales are also expected to have been hit by the storms.
Consumer spending, a key growth engine for the U.S. economy, improved slightly in many districts since the last Fed beige book was released Jan. 13. But it was hampered in several regions by the severe weather of early February, the latest survey showed.
"Manufacturing activity strengthened in most regions, particularly in the high-tech equipment, automobile, and metal industries," the report showed.
The U.S. economy grew at the strongest pace in over six years in the final three months of 2009, but the recovery from the worst recession in decades is expected to slow in the first quarter of 2010.
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