Beige Book shows modest gains in local economy
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The latest economic picture from the Federal Reserve is like one of the great prairie photographs, long and flat with a few slight rises as far as the eye can see.
In 2004 and 2005, the Fed used terms such as "strong" and "robust" to describe the growth of the economy after the 2001 recession. In the period since the end of the most recent recession, economic growth has more often been described as "moderate" or "modest" in the Federal Reserve's regularly issued, "Commentary on current economic conditions," which is commonly called the Beige Book.
While the Fed's latest prediction, based on the last six weeks, is for a fairly subdued economic recovery, the stock market Wednesday started the morning on a rise and kept on going.
The Dow Jones industrial average gained 2.37 percent, adding 286.84 points to close at 12,414.79. The Standard & Poor's 500 index added 29.63 to close at 1,315.13, a gain of 2.3 percent, and the Nasdaq closed up 2.4 percent, adding 66.61 points to close at 2,844.72.
The Wednesday report from the Fed noted that manufacturing in the Cleveland district, which includes Pittsburgh, was steady with a few reports of orders from Europe weakening.
Residential real estate in the district was stronger than it was in other regions, with contractors reporting home construction above where it was a year ago. In other regions of the country, home sellers have been reportedly lowering prices on properties that aren't selling well, putting downward pressure on the market. Residential builders in Philadelphia reported "some softening" in the market there.
While manufacturing in the Cleveland district has been steady with demand driven by the auto industry, Philadelphia manufacturers reported they are seeing a slight decline in orders.
In the Cleveland district, consumer spending was steady over the last month but is up around 5 percent from the same time last year. Auto dealers said new car sales were "generally good."
Bankers said the demand for business credit was rising.
First Published June 7, 2012 12:00 am