Economic recovery may be near, Fed report says

August 11, 2010

In the eyes of most, the second half of 2001 was a dark time for the U.S. economy, despite some glimmers of light from the consumer sector. But what about the future?

Well, thankfully — but not definitively — the "Beige Book" report issued by the Federal Reserve Board in the middle of January provided some evidence that the U.S. economy was in the process of "bottoming out" during the early days of this year. This is welcome news, given concerns last fall that the current recession would be long and deep.

Yet, nothing in the Fed report leads to expectations of a surge in economic activity in the near future. At best, conditions should gradually improve during the course of 2002, as businesses re-stock depleted inventories, and as investment patterns stabilize and turn positive again.

In summary, the latest "Beige Book" report shows that economic activity remained generally and pervasively weak from late November 2001 through mid-January. But there also were scattered reports of encouraging improvement, at least for selected sectors of the economy.

Housing markets, for example, continued to hold up surprisingly well across the board. Although manufacturing activity was reported to be weak, there were some signs of a pickup in auto production. This follows the success of the inventory-depleting "zero percent" sales incentives offered during the final months of 2001. Furthermore, retail sales of most other consumer goods were reported to be surprisingly strong during the holiday season.

Trends identified in the report were an important factor in the Fed's decision not to lower interest rates further at its Jan. 30 meeting.

Cost comparisons per square foot in select metro markets

College laboratory College classroom College dormitory Student union
First quarter '02 '01 % chg. '02 '01 % chg. '02 '01 % chg. '02 '01 % chg.
Atlanta 107.39 104.68 2.6 101.47 98.74 2.8 102.32 98.83 3.5 95.65 92.95 2.9
Baltimore 109.66 107.84 1.7 103.62 101.73 1.9 104.49 101.83 2.6 97.68 95.76 2.0
Boston 137.83 135.19 2.0 130.24 127.53 2.1 131.33 127.64 2.9 122.76 120.04 2.3
Chicago 134.23 130.73 2.7 126.84 123.32 2.9 127.90 123.43 3.6 119.56 116.08 3.0
Cleveland 123.09 120.87 1.8 116.31 114.02 2.0 117.28 114.12 2.8 109.63 107.33 2.1
Dallas 102.11 99.89 2.2 96.49 94.10 2.5 97.30 94.18 3.3 90.95 88.57 2.7
Denver 114.22 112.54 1.5 107.93 106.16 1.7 108.83 106.26 2.4 101.73 99.93 1.8
Detroit 127.64 124.63 2.4 120.61 117.56 2.6 121.62 117.67 3.4 113.69 110.66 2.7
Houston 105.83 103.50 2.2 100.00 97.64 2.4 100.84 97.73 3.2 94.26 91.90 2.6
Kansas City 120.69 117.35 2.8 114.04 110.70 3.0 115.00 110.80 3.8 107.50 104.20 3.2
Los Angeles 129.80 127.32 1.9 122.65 120.11 2.1 123.68 120.22 2.9 115.61 113.06 2.3
Miami 101.99 101.04 0.9 96.38 95.31 1.1 97.18 95.40 1.9 90.84 89.72 1.3
Minneapolis 131.95 130.96 0.8 124.69 123.54 0.9 125.73 123.65 1.7 117.53 116.29 1.1
New Orleans 102.47 100.57 1.9 96.83 94.87 2.1 97.64 94.96 2.8 91.27 89.30 2.2
New York City 161.32 157.84 2.2 152.43 148.89 2.4 153.71 149.03 3.1 143.69 140.15 2.5
Philadelphia 133.27 131.43 1.4 125.93 123.98 1.6 126.99 124.10 2.3 118.71 116.70 1.7
Phoenix 107.15 104.79 2.2 101.25 98.86 2.4 102.09 98.94 3.2 95.43 93.05 2.6
Pittsburgh 121.89 119.11 2.3 115.18 112.36 2.5 116.14 112.46 3.3 108.56 105.76 2.6
Portland 126.80 125.92 0.7 119.82 118.78 0.9 120.82 118.89 1.6 112.94 111.81 1.0
St. Louis 123.45 121.11 1.9 116.65 114.24 2.1 117.63 114.35 2.9 109.95 107.53 2.2
San Diego 126.80 124.74 1.6 119.82 117.67 1.8 120.82 117.78 2.6 112.94 110.76 2.0
San Francisco 149.09 145.75 2.3 140.88 137.49 2.5 142.06 137.61 3.2 132.80 129.42 2.6
Seattle 126.32 122.75 2.9 119.37 115.79 3.1 120.37 115.90 3.9 112.51 108.99 3.2
Washington, D.C. 113.26 111.25 1.8 107.02 104.94 2.0 107.92 105.04 2.7 100.88 98.78 2.1
Winston/Salem 90.37 89.07 1.5 85.39 84.02 1.6 86.11 84.10 2.4 80.49 79.09 1.8

         
 

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