June 11, 2009 in Business

Fed survey finds signs that recession is easing

Associated Press
 
Tags:economyRecession

In the West

Highlights from the Federal Reserve’s survey of economic conditions nationwide. The survey, released Wednesday and known as the Beige Book, is based on information collected from the Fed’s 12 regional bank districts.

San Francisco region

This region covers California, Washington, Oregon, Idaho, Nevada, Utah, Arizona, Hawaii and Alaska. Economic activity slowed further, but there were reports pointing to “signs of stabilization or improvement in some sectors.”

Retail sales were “feeble” with shoppers favoring inexpensive necessities over luxury goods. Sales rose for grocers, but were “anemic” for retailers of furniture, appliances and electronic items.

Manufacturing activity remained at low levels, but conditions improved for makers of semiconductors and other information- technology products.

The housing market remained weak but showed signs of improvement. Many areas reported a pickup in sales aided by low mortgage rates, declining prices and high foreclosure rates.

Home construction remained very slow.

Commercial space saw a decline in demand, with vacancy rates rising. Some tenants have requested and received concessions on lease rates for office and retail space.

Also today

In the West: See a more detailed regional economic look/A10

WASHINGTON – The economy’s sharp slide eased in the late spring and hopes for future business activity improved, suggesting that the worst of the recession has passed.

A Federal Reserve snapshot of economic conditions issued Wednesday found that five of the Fed’s 12 regions said the “downward trend is showing signs of moderating.”

In addition, “several” regions said their expectations of future business activity have improved, although they don’t see a “substantial increase” through the end of the year. In the last survey, several regions simply noted signs of some stability at low levels.

Altogether the assessments of businesses on the front lines of the economy appeared to be slightly better than those they provided in the previous report issued in mid-April.

Known as the Beige Book, the Fed survey is consistent with observations made by Fed Chairman Ben Bernanke and other central bank officials that the recession – which started in December 2007 and is now the longest since World War II – is loosening its strong hold on the economy.

Many analysts predict the economy is sinking at a pace of between 1 percent and 3 percent in the current quarter. If they are right, that would mark a big moderation from the steep declines seen since last fall. The economy shrank at a pace of 6.3 percent in the final quarter of last year and by 5.7 percent in the first three months of this year. It marked the worst six-month performance in 50 years.

The survey’s findings will figure into discussions when Bernanke and his colleagues meet next, on June 23 and June 24. Economists have mixed opinions on whether the Fed will take additional action to bolster the economy at that time.

Some believe the Fed will move to increase its purchases of government bonds beyond the $300 billion already announced in a bid to drive down rates on mortgages and other consumer debt. The goal is to spur Americans to buy more, which would aid the economy.

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