Survey: Economic growth nationally, KC shows manufacturing decline
WASHINGTON (AP) - The U.S. economy was expanding in all regions of the country in the late spring, aided by strong sales of autos and other consumer goods.
In its latest survey of business conditions, the Federal Reserve said Wednesday that some of its regions reported that lower energy prices were encouraging consumers to shop and eat out more. Growing sales of homes and commercial real estate also boosted the economy.
Employment growth was solid, although some layoffs were reported in manufacturing and energy industries, which have cut back because of falling prices.
The Fed report, known as the beige book, will be used by officials when they meet July 28-29 to consider interest rate policies. The Fed is not expected to start raising rates until at least September.
Fed Chair Janet Yellen told Congress on Wednesday that she was encouraged by signs of an economic rebound following a brutal winter. If the economy and job market keep improving, she reiterated that the central bank would likely begin raising interest rates later this year. The Fed's benchmark rate has been at a record low near zero for more than six years.
In the beige book, the Fed found that inflation has remained steady, with only modest upward pressure on wages outside of some positions requiring specialized skills.
Manufacturing activity was described as uneven. Four districts - Philadelphia, Richmond, Atlanta and Chicago - reported gains in factory production.
But three districts - Cleveland, Kansas City and Dallas - reported declines in manufacturing. Some of the weakness was blamed on the rising value of the dollar, which was hurting exports, and cutbacks in demand for equipment in the energy sector.
Producers of primary metals such as steel generally reported strong demand. Solid growth also bolstered the aerospace, construction and plastics industries.
Home sales were stronger across most parts of the country. Commercial real estate was also on the upswing, with low and declining vacancy rates for many properties.
Heavy rainfall caused crop damage in the Chicago and St. Louis districts. Chicago also reported disruptions in grain shipping due to higher water levels on the Mississippi River.
Kansas City said heavy rains had lowered expectations for winter crop harvests. But the Dallas district said that heavy rainfall had relieved drought conditions. San Francisco reported ongoing drought conditions in California.
The Chicago and San Francisco districts both reported that outbreaks of avian flu were resulting in higher prices for poultry and eggs.