Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, November 4, 1993 TAG: 9311040015
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
It said business activity was spotty in California and New York, and mentioned some signs of inflation in the raw materials that manufacturers buy. But overall the Fed's assessment of regional business activity was seen by economists as a bit more optimistic than its last report in September.
"Activity has been increasing at a slow to moderate pace," the Fed said in the "beige book," named for the color of its cover. "Consumer spending rose in a majority of districts, with particular strength noted in sales of autos and other durables," big-ticket items intended to last three or more years.
Wednesday's report summarized anecdotal material collected before Oct. 26 by the Fed's 12 regional banks. It will be used by monetary policy-makers at their next meeting Nov. 16.
The Fed has left short-term interest rates unchanged since September 1992, and economists said the latest beige book, while a bit more positive, did not show enough growth or inflation to prompt the central bank to nudge rates higher anytime soon.
"The message to the Fed here is, `Stand pat, you're doing fine. Things are picking up and inflation is a non-problem,' " said economist Robert Dederick of Northern Trust Co. in Chicago.
Autos sales were so much above expectations that some dealers reported inventory shortages before the 1994 models showed up. Consumers also were buying appliances and furniture. Retailers were expecting year-over-year gains in Christmas sales, but less growth than between 1991 and 1992.
Manufacturing "showed some improvement," with production gains reported in autos and parts, construction-related products such as cement, brick and glass and electronics, semiconductors and paper.
Crop damage continued to be reported from rain in the Midwest and drought in the South, but reports from livestock producers were favorable.
Tourism was doing well in some areas. Loan demand was "steady to slightly improved" in most districts. Mining activity was unchanged, but oil and gas exploration was on the upswing.
Price increases were noted for some building supplies and raw materials going into manufactured goods, but so far that is not feeding through to the retail level, where prices were described as "flat or competitive."
The Fed's compilation of anecdotal material fits with recent economic statistics showing growth improving overall nationally.
"The interest-sensitive sectors of our economy are responding, and we are well on our way to a healthy and steady, investment-led recovery," Treasury Secretary Lloyd Bentsen said Wednesday in testimony to the Senate Finance Committee.
by CNB