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Rosy Picture Painted by Fed's 'Beige Book' : Survey: Regional banks report modest gains in retail sales and industrial output. But jobs still lag.

May 06, 1993|From Reuters

WASHINGTON — The Federal Reserve's regional banks Wednesday reported "generally modest improvement" in much of the nation's economy, with retail sales and industrial output on the upswing but job prospects mixed.

The periodically issued so-called "beige book," based on surveys of businesses by all 12 Fed district banks that were conducted before April 23, painted a more optimistic picture of the economy than more recent government data has portrayed.

The generally upbeat view, however, made clear that jobs were still not being created at a pace likely to satisfy Clinton Administration policy-makers.

However, among the most promising economic signs contained in the report was an improvement in consumer spending, which had been severely dampened in March, in part because of a blizzard that hit the East Coast.

"Shopper traffic and retail sales were reported to rebound modestly in April, following general declines in March, resulting in part from severe weather," the Federal Reserve Bank of Cleveland said in its summary.

Leading the increase were sales of "big ticket" items, such as furniture and home appliances, the survey said. Sales of cars and light trucks were also reported higher by most Fed districts, it said.

Retail sales are vital for economic health since consumer spending accounts for two-thirds of all economic activity.

The Fed banks survey the economy coast-to-coast at about six-week intervals to get a sense of activity at the business and consumer level. The last survey was issued on March 10.

The Fed banks' survey said the industrial sector continued to strengthen.

"Manufacturers in most districts report increases in shipments and orders, with near-capacity production at some automotive and steel facilities," the survey said.

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