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Manufacturing Is Up, Federal Reserve Says

May 06, 1999| From Times Wire Services

WASHINGTON — Manufacturing is picking up again in most parts of the country as jobs remain plentiful and consumers continue to spend briskly, the Federal Reserve said Wednesday.

"The U.S. economy continues to operate at generally strong levels and to expand at a moderate pace," the nation's central bank said in a survey of regional economic conditions before April 26.

"Prices generally remain stable," the Fed said in its latest "beige book" report, named for the color of its cover. The compilation of anecdotal information is collected by the Fed's 12 regional banks for the benefit of Fed policymakers, who are scheduled to meet next on May 18.

"Consumer spending remains healthy, led by strong motor vehicle sales," the Fed summary said.

The survey said most of the 12 Fed districts reported improvements in manufacturing, although some regional Fed banks complained of weak foreign sales.

With unemployment holding at a 29-year low, the Fed said, many parts of the country are experiencing labor shortages, notably construction workers and truck drivers.

In the West, the San Francisco district reported that economic activity was robust, even though manufacturers and agricultural producers were hampered by weak international trade conditions. The retail and service sectors were strong, and there was vigorous activity and expansion in the housing market.

Price increases were limited overall, despite sharp rises in gasoline and certain service costs, the San Francisco bank said.

In a separate report Wednesday, the Commerce Department said orders to American factories rose 2% to a seasonally adjusted $350 billion in March, after a 1.8% plunge in February.

That recovery was stronger than analysts had expected.

The March increase in factory orders was led by a 2.9% jump in demand for durable goods.

Demand for nondurable goods was up 0.8% in March.

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