Fed finds mod­er­ate growth

Los Angeles Times - - REAL ESTATE -

The U.S. econ­omy was grow­ing at a mod­er­ate pace in most re­gions of the coun­try in April and May, as con­sumers ramped up spend­ing at re­tail­ers and auto deal­ers, the Fed­eral Re­serve said Wed­nes­day.

In its lat­est sur­vey of busi­ness con­di­tions around the coun­try, the Fed said that man­u­fac­tur­ing ac­tiv­ity held steady or in­creased, ex­cept in the en­ergy in­dus­try. Some com­pa­nies laid off work­ers and cut back on drilling ac­tiv­i­ties in re­sponse to the big fall in oil prices over the last year.

The report, known as the beige book, will be re­viewed at the Fed’s June 16-17 meet­ing. Econ­o­mists ex­pect the cen­tral bank’s pol­i­cy­mak­ers to de­lay any rate hike un­til they see more signs of an eco­nomic re­bound.

Four dis­tricts — Bos­ton, At­lanta, Chicago and St. Louis — re­ported mod­er­ate growth in man­u­fac­tur­ing, while some other dis­tricts said growth was f lat dur­ing the sur­vey pe­riod.

The report found wide- rang­ing con­se­quences from the fall in en­ergy prices, with more than half the Fed’s 12 dis­tricts re­port­ing a neg­a­tive im­pact on com­pa­nies that ei­ther op­er­ate in the en­ergy sec­tor or pro­vide ser­vices to en­ergy com­pa­nies.

The report noted that con­sumer spend­ing rose in all dis­tricts ex­cept Rich­mond, Va., and New York. The drop in gas prices was spurring a shift from sales of cars to light trucks and sport util­ity ve­hi­cles. Tourism also picked up in a num­ber of dis­tricts, lift­ing de­mand for ho­tel and re­sort book­ings.

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