Beige Book Says Economy Speeds Up "A Notch"

By Agence France-Presse The sluggish U.S. economy sped up "a notch" in the past few weeks, igniting recovery hopes, the Federal Reserve's Beige Book survey showed July 30. "Reports from the 12 Federal Reserve districts provided additional signs that the pace of economic activity increased a notch during June and the first half of July," it said. "Consistent with the generally more positive assessments of current economic activity, several districts noted increased optimism about economic prospects in coming months." The Beige Book survey, released eight times a year, added to a crescendo of brightening economic data and predictions of accelerated economic growth in the second half of this year. Factories, which have shed 2.7 million jobs during a three-year slump, were finally coming out of the doldrums, said the report. "Nascent signs of a recovery emerged in the manufacturing sector, with 10 of the 12 district reports indicating mixed, steady or slightly improved conditions after an extended period of declines," it said. Housing sales and construction, boosted by low mortgage rates, were "strong," the Federal Reserve said. "In contrast, consumer spending remained lackluster." Prices and wage inflation were now "broadly in check," the latest Beige Book report said. Economic data improved in June, with retail sales up 0.5%, groundbreaking on new homes surging 3.7%, and industrial production rising 0.4%. The Beige Book survey made little mention, however, of the job-scarce labor market. The U.S. unemployment rate shot to a nine-year high of 6.4% in June, and many analysts expect the latest figures, due out Friday, to show the jobless rate rose a little in July. Copyright Agence France-Presse, 2003