Moderate economic growth in local district

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The broad area of the country that includes the Rust Belt cities of Pittsburgh, Cleveland, Erie, Toledo, Cincinnati and Dayton has been growing at a moderate rate from the spring into the early summer.

That's slightly faster growth than the region, which is all one single Federal Reserve district, experienced this past winter.

According to the latest "Summary of Commentary on Current Economic Conditions by Federal Reserve District" -- more commonly known as the Beige Book -- released Wednesday, the nation's economy grew at a "modest to moderate pace" over the last six weeks.

The Cleveland district was at the moderate end of that spectrum.

While single-family home sales declined somewhat, one contractor told the Federal Reserve it was not unheard of for June sales to go down slightly compared to the early spring. Still, people in real estate said this past June was better than last year and new home contracts were made mostly in the mid-range and higher-priced categories of homes.

For bankers, that meant that while residential mortgage activity remained high, refinancing was not strong because interest rates have been rising.

Sales of homes over the spring helped manufacturers in the district. While steel producers reported that shipping volumes were running about the same as they had been, some companies that saw the best activity were those that supplied the residential construction industry.

Motor vehicle plants were running about the same volume they were earlier this spring, but turning out more cars and parts than they had in June 2012.

Consumer spending was not at the level where retailers had hoped it would be. While motor vehicle sales were up slightly -- with buyers choosing mostly small, fuel-efficient models -- most other retailers told the Fed officials who compile the Beige Book that sales in May were lackluster and below what they had planned. Hiring is not anticipated except for new stores.

In the energy sector, declining coal production appeared to be levelling off. The number of drilling rigs across the whole district has fallen in 2013 even as output from both conventional drilling and hydraulic fracturing wells remained stable. Oil production was up slightly. Overall, according to the Federal Reserve, energy payrolls and labor costs were flat.

businessnews

Ann Belser: abelser@post-gazette.com or 412-263-1699.


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