The regional economy grew at a moderate pace in recent weeks, as increases in home, auto and retail sales and strong shale gas production were offset by sluggish hiring, flat demand for business loans, and slowing demand for freight traffic, the Federal Reserve Board said Wednesday.
The Fed said the national economy accelerated at a modest to moderate pace, the same conclusion it reached when it last reported on business conditions in early September.
Economic growth held steady in eight of the districts, including the one that includes Pittsburgh, but slowed in the Philadelphia, Richmond, Va., Chicago and Kansas City, Mo., districts. The central bank said contacts who participated in the survey remain generally optimistic "although many also noted an increase in uncertainty due largely to the federal government shutdown and debt ceiling debate."
The assessment, known as the Beige Book, is based on reports that the Fed's 12 district banks collected from businesses and other observers between Aug. 27 and Oct. 7. That included the first week of the federal government shutdown, which began on Oct. 1.
In the Cleveland district, which includes Pittsburgh, there were slight increases in the number of job openings and hiring. Openings were primarily in health care and manufacturing. The sluggish conditions meant there was little pressure to increase wages to fill vacant positions, the Fed said. The exception was construction, where builders cited a shortage of high-skilled workers because of the number who left the business after the onset of the recession.
Steel producers in the region reported a slight increase in shipments, but they "do not expect market conditions to change appreciably in the upcoming months," the report stated.
Demand for business loans in the district was flat compared to the previous report, although there was a slight improvement for consumer credit, especially auto loans and credit cards.
One regional contact told the bank that the shale gas industry will grow very slowly through the end of next year because of low gas prices and uncertainty about what federal, state and local regulators will do.
Len Boselovic: firstname.lastname@example.org or 412-263-1941. First Published October 16, 2013 8:00 PM