Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=198311
Story Retrieval Date: 5/21/2013 3:52:26 PM CST
The U.S. economy’s slow recovery is showing signs of accelerating, according to a report released Wednesday by the Federal Reserve.
“Compared with prior summaries, the reports on balance suggest ongoing improvement in economic conditions in recent months,” Fed Chairman Ben Bernanke explained.
Most districts, he said, enjoyed more favorable conditions than reports from the late spring through early fall found.
The Fed’s “Beige Book,” issued eight times a year, evaluates recent economic performance and includes data drawn from industry experts and contacts ranging from bank managers to economists and industrial interests in the 12 districts across the country.
The report found growth in areas where it had been expected, and also found expansion in unanticipated segments.
“I was surprised to see the strength of consumer spending and particularly tourism,” said David Nice, an associate economist at Mesirow Financial Holdings, Inc.
Most districts experienced solid gains or high levels of consumer spending, travel and tourist activity, the report noted. The Chicago and New York areas were the nation’s top-performing districts, the report found.
The report noted that the housing sector remains deeply troubled, and is serving as a drag on growth.
Overall, the report hinted that the nation’s economy is gaining momentum as it shakes off earlier troubles. That improvement has been apparent in the nation’s gross domestic product - the sum of all products and services produced in the U.S. - which has increased steadily in 2011 after a sluggish end in 2010.
Despite the generally positive trend, the Beige Book survey is unlikely to end the ongoing debate over whether more Fed intervention is needed to stimulate the economy.
Prior to the early-afternoon release of the report Wednesday, the head of the Federal Reserve Bank of Chicago, Charles Evans, called for more action on the part of the Federal Reserve as long as unemployment remains above 7 percent.
In December, the unemployment rate was at 8.5 percent, the lowest rate in nearly three years but well above normal levels.
“Given the high unemployment rate and low job growth,” Evans asserted,.“I think it is clear that the Fed has fallen short in achieving its goal of maximum employment.” Evans has recently argued repeatedly that the Fed hasn’t been doing enough to spur the economy.
The financial markets closely monitor the release of the Beige Book, because, federal policymakers often shape monetary policy based on its findings.
The latest report, however, “ is relatively benign,” Mesirow’s Nice said.” I don’t foresee any major policy changes.”