WASHINGTON: Strong auto sales, hiring gains and a continued housing recovery helped the U.S. economy grow throughout the country in January and February, according to a survey released Wednesday by the Federal Reserve.
The Fed says 10 of its 12 banking districts reported moderate or modest growth, while Boston and Chicago districts reported slow growth.
The economy in Ohio and parts of neighboring states grew modestly while job growth was sluggish, the Federal Reserve Bank of Cleveland reported.
Most job vacancies were in shale energy and motor vehicle industries, the Cleveland Fed said.
Manufacturing orders and production in the district were steady or rose slightly.
Residential construction continued to show positive momentum while nonresidential construction was slowing. Homebuilders cut back on discounting.
Retail sales in January fell from a year ago, although sales of new cars and light trucks showed solid gains.
Shale oil and natural gas activity expanded robustly while there was little change in conventional oil and natural gas production. Some coal operators reported laying off workers; many contacts said rising health insurance costs are a concern.
Freight transport volume was better than had been projected.
Demand for business and consumer credit largely was flat but there was increased demand for home equity and motor vehicle loans, the Cleveland Fed said.
Nationally, consumer spending increased in most regions, although growth slowed in many districts and much of the increases were driven by auto sales. Many districts said that consumers pulled back slightly on spending outside of autos after seeing taxes rise and gas prices increase. Some also expressed concerns about federal spending cuts that started on March 1.
Housing markets showed more strength in nearly all parts of the country, while manufacturing showed modest improvements in most regions. And most districts reported some improvement in individual jobs markets.
The report, called the Beige Book, provides anecdotal information on economic conditions through February 22. The information will be used as the basis for the Fed’s policy discussion at the March 19-20 meeting. Many economists believe Fed officials will take no new steps when they meet.
In January, the Fed stood behind aggressive steps it launched in December to try to reduce unemployment. It repeated that it would keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. And the Fed said it would keep buying Treasury and mortgage bonds to help lower borrowing costs and encourage spending.
The unemployment rate was 7.9 percent in January when the Fed last met.
The economy has shown improvement since then, even as Americans paid higher taxes and automatic government spending cuts loomed. On Jan. 1, nearly all Americans who draw a paycheck began paying higher Social Security taxes and income taxes rose for the highest earning workers.
The tax increases and broader budget debate in Washington haven’t slowed financial markets.
The Dow Jones industrial average closed Tuesday at a record high and kept rising Wednesday. The index of 30 big corporations has more than doubled since hitting a low during the financial crisis in March 2009.
Consumer confidence rose in February from January, according to surveys by both the Conference Board and the University of Michigan. Factories and service companies both grew at the fastest pace in at least a year, according to surveys issued Friday and Tuesday by the Institute for Supply Management.
And payroll processor ADP said Wednesday that U.S. businesses added 198,000 jobs in February. The private survey also revised January’s hiring figures to show companies added 215,000 jobs that month, 23,000 more than what had initially been reported.
The figure suggests that the government’s February jobs report, to be issued Friday, could come in above economists’ forecasts. Analysts expect it will show the economy added 152,000 jobs and the unemployment rate dipped to 7.8 percent from 7.9 percent in January.
Beacon Journal business writer Jim Mackinnon contributed to this report.