WASHINGTON — The U.S. economy has continued to shake off its winter sluggishness with all regions of the country seeing expansion, the Federal Reserve said in a report Wednesday. Seven of the 12 regions surveyed recorded only “modest” growth, while five notched “moderate” growth, the Fed said in its latest Beige Book report, based on economic conditions in the six-week stretch before July 7. The report is the second Beige Book in a row to find growth across the country and is the latest evidence the U.S. economy is picking up steam after unusually cold weather depressed activity in the first quarter. Auto sales, which have been on the upswing for more than a year, continued to stand out as particularly brisk support for the economy. “Vehicle sales expanded in most districts, and auto contacts were optimistic about auto sales in the months ahead,” the report said. But the report’s assessment of consumer spending, a key lifeblood of the U.S. economy, was more subdued about the broader retail performance. Non-auto retailers garnered “generally modest growth,” with wet weather restraining activity in Chicago, but New York seeing a rise “due to pent-up demand as the negative effects from earlier adverse weather abated.” Tightened Labor Market The labor market tightened exceptionally in some pockets of the economy. Several districts reported “some difficulty” finding staff for skilled positions, the report said, citing a shortage of truck drivers in Atlanta, Cleveland, Kansas City and Richmond. Skilled construction workers were also in short supply in some parts of the country, while the energy boom kept labor markets tight in the Cleveland and Dallas regions.
But the pace of growth for the labor market at large was more tortoise than hare. Wage pressures “remained modest” across most sectors, aside from a few skilled-labor categories, the report said.
The overall labor market “continued to improve,” with all districts “reporting slight to moderate employment growth,” the report said. The report gave a mixed appraisal of the U.S. housing market. Conditions “varied” across the country, with some regions suffering from weak demand.
Boston, New York, Chicago and St. Louis all reported that residential sales activity softened, the report said.
During testimony before a Senate panel Tuesday, Fed Chair Janet Yellen pointed to a stalling housing market with disappointing sales. The report comes on the heels of a string of U.S. labor data showing greater jobs growth and other data that reveals an improving economy, but one that is by no means entering overdrive. A Commerce Department report released Tuesday showed retail and food services sales rose just 0.2 percent in June. “We see a modest economy, which is modestly getting better,” JPMorgan Chase chief executive Jamie Dimon told a conference call this week. Economic growth has been strong enough for the Fed to scale back its stimulus measures even as it continues to keep benchmark interest rates near zero.
Yellen warned of “false dawns” in the five-year-old dragging recovery. This month’s Beige Book report will be used at a monetary policy meeting of the Federal Open Market Committee on July 29 and 30.