Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 8, 1994 TAG: 9412220010
SECTION: BUSINESS PAGE: B10 EDITION: METRO
SOURCE: KNIGHT-RIDDER/TRIBUNE
DATELINE: WASHINGTON LENGTH: Medium
The U.S. economy has not shown any signs of slowing, while inflation is beginning to appear at the finished goods level, the Federal Reserve said Wednesday in its Report on Current Economic Conditions.
``Economic activity generally is continuing to expand at about the same pace as in recent months,'' the Fed said in its ``beige book'' report.
Meanwhile, ``prices of raw and intermediate materials continue to advance, with reports of some increases being passed through to final product prices,'' the Fed said. The Fed added, however, that price increases remain much less widespread at the finished goods level than at the raw and intermediate levels.
Labor markets continued to tighten, with more districts ``reporting increasing wages in selected occupations,'' the Fed said.
Those ``wage increases have generally been confined to skilled construction and industrial occupations and entry-level service and retail occupations,'' the report said.
Rising wages were reported in the Boston, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City and Dallas districts.
Manufacturing activity continued to increase with rising shipments and high levels of capacity use in many districts, the Fed said. In the past month, the strongest activity was in durable goods industries.
The Fed beige book is released every six weeks, shortly before the policy-making Federal Open Market Committee meets.
The next FOMC meeting is scheduled for Dec. 20.
Wednesday's report was prepared based on information obtained from the 12 Fed districts before Nov. 29.
Prices for raw and intermediate materials continued to rise, especially for paper products, plastics, chemicals, steel and building materials, the beige book said.
``Auto sales held up well in most regions, except where dealers continue to have difficulties obtaining popular models,'' the report said.
The service sector, which includes accounting, legal, computer and temporary help firms, has also been performing well, the Fed said.
The Fed said ``examples of weak industries are much less common.'' The Fed cited weakness in only two sectors - aerospace and apparel.
Also, ``single-family homebuilding continues to cool across most districts,'' the report said.
At the same time, commercial real estate sales and construction have picked up considerably in the Boston, New York, Atlanta, St. Louis, Minneapolis and Dallas districts.
``Commercial real estate activity has been boosted by tightening markets for office space'' in the New York, Atlanta and Dallas districts, the Fed said.
Loan demand was also reported to be up in most districts. Demand for commercial and industrial loans has risen in most districts, except New York and Richmond.
Consumer lending continued to grow in many areas, led by auto loans.
Residential mortgage lending and refinancing activity remained flat or fell in many districts.
The Boston district also noted an outflow from bond funds, though employment at asset management firms there remained stable.
by CNB