Improving conditions in the construction sector and rising home prices are boosting growth in the U.S., according to the Federal Reserve. The information was published by Reuters late Wednesday afternoon.
The account by the Fed’s 12 regional banks was slightly more upbeat than the previous Beige Book survey, with Dallas and New York noting a slight acceleration in the pace of expansion, while five saw growth as moderate, and the other five as modest.
“Reports from the 12 Federal Reserve districts suggest overall economic activity expanded at a moderate pace during the reporting period from late February to early April,” the Fed said, summarizing the anecdotal findings of the 12 banks.
“Aside from reports of increases in home prices and residential construction materials, price pressures remained mostly subdued across Districts,” it said.
The Fed voted last month to maintain bond purchases at a $85 billion monthly pace and to hold interest rates near zero until unemployment hit 6.5 percent, provided inflation remained under 2.5 percent. The U.S. jobless rate in March was 7.6 percent.
The current Beige Book was prepared by the Dallas Fed, on the basis of information collected on or before April 5.
According to USAToday, The Fed’s report came as the stock market is scrambling back from a nearly 200-point decline in the Dow Jones industrial average, sparked among other reasons by Bank of America’s failure to meet earnings forecasts. Last week, Wells Fargo said its outlook for this year was clouded, if slightly, by a slowdown in demand for mortgages. Though the Beige Book reported that loan demand is “stable or slightly higher across nearly all districts,” Fed district banks agree loan demand is improving, but not all that fast.
The bottom line? The Fed’s report glosses over the cautious notes that have seeped into recent economic data, including bank earnings, which have sparked fears that the economy will swoon again at midyear, as it has every year since 2010.
You can read the entire report here.