Silke
07.03.2001, 20:07
Fed: Sluggish to modest U.S. growth
Beige Book report notes tight but easing job market
By Rachel Koning, CBS.MarketWatch.com
Last Update: 2:00 PM ET Mar 7, 2001
WASHINGTON (CBS.MW) - U.S. growth was "sluggish to modest" in the first two months of the year as retailers deeply discounted goods, the factory sector slumped, and a still-tight job market showed signs of easing, the Federal Reserve said.
Over half of the Fed's districts reported "some signs of easing" in the labor market, the Fed said Wednesday in its periodic "Beige Book" report on economic conditions around the country.
Factory employment continued to lead among industries experiencing a slowdown.
The Fed noted in particular declines in production of high-tech products and motor vehicles in some districts, while output of electronics and telecom equipment slumped in other areas of the country. Industrial equipment and building materials production also waned.
Several bank branches reported high inventory stockpiles among the manufacturers in their region.
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The Fed's report, so named for the color of its cover, covered January and February.
The central bank's interest-rate setting arm will next meet on March 20 and is widely expected to cut a key rate by 50 basis points, having already sliced a full point from the target during January.
Districts said that in addition to easier demand for factory workers, jobs in construction and high-tech were apparently harder to come by in the early part of this year. Demand remained strong for clerical and healthcare workers.
Employers around the nation noted some easing in wage pressures during the period, although benefits costs remained high.
Prices outside of energy remained contained, helped in part at the retail level because of price slashing on winter goods. Most businesses, save for those in the Dallas and San Francisco regions, are not having to pass along higher energy costs to consumers.
After-season sales helped to lift consumer spending. But sales of cars were off in the first two months of the year compared to last year. Americans did still spend on winter vacations, however, with tourism solid for much of the nation.
Commercial construction activity slowed around the United States, although demand for residential building remained strong. Both the new home and home resale markets were abuzz with selling, thanks in large part to falling mortgage rates.
Commercial vacancy rates were said to be steady, with some districts noting the impact closing Internet and high-tech firms have had on the commercial rental market.
Banks continued to use more prudent lending standards, particularly business loans and commercial real estate loans.
On the demand side, high-tech, telecommunications and Internet firms in particular scaled back business expansion through borrowing early in 2001.
Rachel Koning is a reporter for CBS.MarketWatch.com
Beige Book report notes tight but easing job market
By Rachel Koning, CBS.MarketWatch.com
Last Update: 2:00 PM ET Mar 7, 2001
WASHINGTON (CBS.MW) - U.S. growth was "sluggish to modest" in the first two months of the year as retailers deeply discounted goods, the factory sector slumped, and a still-tight job market showed signs of easing, the Federal Reserve said.
Over half of the Fed's districts reported "some signs of easing" in the labor market, the Fed said Wednesday in its periodic "Beige Book" report on economic conditions around the country.
Factory employment continued to lead among industries experiencing a slowdown.
The Fed noted in particular declines in production of high-tech products and motor vehicles in some districts, while output of electronics and telecom equipment slumped in other areas of the country. Industrial equipment and building materials production also waned.
Several bank branches reported high inventory stockpiles among the manufacturers in their region.
FRONT PAGE NEWS
Palm to buy Extended Systems
The Fed's report, so named for the color of its cover, covered January and February.
The central bank's interest-rate setting arm will next meet on March 20 and is widely expected to cut a key rate by 50 basis points, having already sliced a full point from the target during January.
Districts said that in addition to easier demand for factory workers, jobs in construction and high-tech were apparently harder to come by in the early part of this year. Demand remained strong for clerical and healthcare workers.
Employers around the nation noted some easing in wage pressures during the period, although benefits costs remained high.
Prices outside of energy remained contained, helped in part at the retail level because of price slashing on winter goods. Most businesses, save for those in the Dallas and San Francisco regions, are not having to pass along higher energy costs to consumers.
After-season sales helped to lift consumer spending. But sales of cars were off in the first two months of the year compared to last year. Americans did still spend on winter vacations, however, with tourism solid for much of the nation.
Commercial construction activity slowed around the United States, although demand for residential building remained strong. Both the new home and home resale markets were abuzz with selling, thanks in large part to falling mortgage rates.
Commercial vacancy rates were said to be steady, with some districts noting the impact closing Internet and high-tech firms have had on the commercial rental market.
Banks continued to use more prudent lending standards, particularly business loans and commercial real estate loans.
On the demand side, high-tech, telecommunications and Internet firms in particular scaled back business expansion through borrowing early in 2001.
Rachel Koning is a reporter for CBS.MarketWatch.com