Economy just grew up a little, according to the Feds

The regular report from the Feds shows that the economy had shown modest gains although it continued to be sluggish and tepid. There were weak signs of revival as the banks continued to combat with slow loan demand. In the middle of it all the condition of the commercial real estate market fell.

The regular report on the economy by the feds was based on interviews taken in late October and November. It was released on 2nd December. Little or negligible change was noted in four zones of Atlanta, Cleveland, Philadelphia and Richmond.

Despite this the Feds opined that there were signs of increase in spending by consumers and in manufactures. The housing market too seemed to be picking up together with sale of automobiles. The report filed is known as Beige. The Federal Reserve would make use of the analysis when it sets into motion the monetary policy of the government this month. The report rings a cautious tone and there does not seem the possibility that the government would be persuaded to shift the interest rates from its record breaking low levels.

In a matter-of-fact mood the report gave little hope about the economy of USA making a resurgence with a bang in the near future. The report concluded, “Economic conditions have generally improved modestly.”

The chief economist of MG Global, James F. O’Sullivan remarked that the assessment of the Federal Reserve suggests that the worries regarding the falling of the economy into another spin downwards were baseless. He remarked, “A sustained recovery is under way, but the jury is still out on how strong it’s going to be. There’s nothing here to support double-dip fears.”

The Federal Reserve mentioned the declining demand for loans in nearly half of the regions. The central bank also reported stringent credit card rules were making the consumers more nervous and worried about the prospects for jobs and levels of income. These fears could hamper spending.

In many areas commercial real estate markets were worrying with increase in vacancy numbers, fall in rents and stagnation in constructions. The central bank characterized the real estate to be “very weak and, in many cases, deteriorating. Sale of residential houses however had picked up although prices continued to remain flat.

In particular the unemployment scenario continued to be grim despite “scattered signs of improvement.” Wages remained low but pace of joblessness had gone down in regions like Atlanta, Cleveland and Richmond.

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