A Federal Reserve survey shows severe weather held back economic growth in much of the nation from January through early February. Even so, conditions improved in most U.S. regions thanks to slight gains in areas such as employment and commercial real estate.
Eight of the Fed’s 12 regions — including Kansas City — reported improved activity, according to the Beige Book survey, released Wednesday. The improvement was depicted as “modest to moderate.”
New York and Philadelphia, two regions hit by winter storms and freezing cold, reported a dip in activity attributed to the weather. Retail sales, including auto purchases, were depressed. So was manufacturing. Factories reported power outages and delayed deliveries of supplies.
The Beige Book is based on anecdotal reports from businesses and will be considered with other data when the Fed meets March 18 and 19.
The summary and the individual reports from each of the 12 regions were sprinkled with references to the harsh weather much of the country has endured this winter.
The report said retail sales had weakened in many districts because of the winter storms. Nine districts — Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis and Dallas — reported that the severe weather had hurt factory production and manufacturing sales.
The report said the weather had caused power outages, disrupted supply chains and curtailed factory production schedules.
The Kansas City district reported that the economy in its seven-state area is expected to improve during the next few months. It also noted that consumer spending declined in February “as a decrease in automobile, retail and restaurant sales outweighed an increase in tourism activity.”
Manufacturing activity increased slightly in the Kansas City district, which includes Kansas and the northern half of Missouri. But construction and residential real estate activity fell slightly last month.
When the Fed meets later this month to consider the Beige Book, among other economic evidence, it will be the first meeting under the new Fed chair, Janet Yellen. Last month, Yellen succeeded Ben Bernanke, who stepped down after eight years as chairman.
The widespread expectation is that the Fed will continue paring the monthly bond purchases it has been making to try to keep long-term loan rates low to support the economy.
At a ceremonial swearing-in at the Fed’s headquarters, Yellen said the Fed had made much progress in repairing the damage caused by the financial crisis and recession but had more work to do. Yellen said too many Americans still couldn’t find jobs or were being forced to work part time. She pledged to “do all that I can” to achieve the Fed’s dual goals of maximum employment and stable prices.