Fed report: Economy expanding moderately
WASHINGTON — The nation’s employment climate improved, stores rang up sales and factories boosted production last month, fresh signs the economy is chugging ahead at a respectable pace.
That was the latest snapshot of economic activity presented Wednesday in the Federal Reserve’s survey of business conditions.
“The economy has continued to expand at a moderate pace,” according to the survey, based on information collected on or before Feb. 28.
The survey also found that retail prices were “generally flat or up modestly.” Some companies, affected by higher prices for fuel, steel and other raw materials, were more inclined to pass along some of these costs to customers, the survey said.
These indicators of inflation, jobs and other economic conditions will be discussed by Fed policy-makers when they next meet, on March 22.
To keep inflation and the economy on an even keel, the Fed has pushed up short-term interest rates six times — each in one-quarter percentage point moves — since June 2004. Economists are expecting an additional quarter-point increase at the March meeting.
The latest Fed survey “is a recipe for continued Fed rate hikes,” said Steve Stanley, chief economist at RBS Greenwich Capital.
At the March meeting, economists will watch closely for any sign that Fed policy-makers will stick with or abandoning their current stance of gradually raising interest rates.
With the job market clearly on the mend, some economists believe the central bank will stick with such an approach.
On the jobs front, the Fed survey said “labor markets strengthened in almost all districts.”
Information for the survey is based on reports from the Federal Reserve’s 12 regional districts.
Boston, New York, Atlanta, Minneapolis, Richmond, Chicago and Kansas City were among the districts reporting improvements in employment conditions.
“Perhaps most impressively, the assessment of labor market conditions has been upgraded substantially over the past few” Fed surveys, Stanley said.