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Regional economic outlook summaries

January 22, 1997

Summaries of economic conditions in the 12 Federal Reserve districts, according to a survey by Fed regional banks.

BOSTON _ The economy continues to expand at a moderate pace. Retailers say holiday sales were modestly higher than a year earlier. Over half of the manufacturing contacts report rising or unchanged revenues. Commercial real estate is fairly stable. Prices of manufactured goods are said to be generally level. Retailers also say most prices are stable.

NEW YORK _ The economy has a slightly firmer tone; price pressures remain subdued. Major retailers report holiday-season and post-season sales on or above plan. Persistent strength is seen in the commercial and multi-family real estate markets, but the single-family housing market lags. Tourism remains strong. There has been no evidence of increased price pressures.

PHILADELPHIA _ Economic activity has been moving up slowly. Manufacturing orders were increasing. Most retailers met their planned sales levels for the Christmas season, but electronics and computer stores failed to match either expectations or year-ago results. Auto sales dropped seasonally. There does not appear to be an acceleration in the rate of general wage increases.

CLEVELAND _ The economy is holding steady at a good level. Every major area reports favorable business conditions, with especially strong activity in central and southeastern Ohio and northern Kentucky. Employment growth remains above its rate of a year ago. Wage growth has picked up for skilled workers. Benefit packages at smaller firms have increased.

RICHMOND _ Economic activity remained at a high level, although growth has moderated. Retail sales rose sharply and commercial real estate remains strong. Service sector growth slowed while manufacturing activity was mixed. Weather hurt ski resorts and hampered crop harvests. Labor markets tightened; wage pressures were more evident. Price increases were more widely reported.

ATLANTA _ Economic activity continues to grow at a moderate pace. Retailers’ December sales were mixed. Manufacturing production and orders declined slightly. Tourism and business travel was at high levels. Single-family home sales varied, while commercial real estate improved. Despite shortages of qualified workers, wages are generally holding steady.

CHICAGO _ Economic activity increased moderately. Holiday sales came in above last year’s lackluster results, but short of many expectations. Housing activity picked up and manufacturing activity increased modestly. Hog production lagged year-ago levels. Labor markets tightened with many contacts reporting increasing wage pressures.

ST. LOUIS _ Economic activity has picked up. Retailers report holiday sales met or exceeded expectations. Dealers report auto sales unchanged from a year ago. Other business contacts report continued growth and optimism. Tight labor markets still prevail in many areas. Transportation contacts say energy price increases being passed along to customers. Real estate markets remain strong.

MINNEAPOLIS _ The economy is growing moderately. Construction vitalizes many areas. Oil development is pumping cash into parts of three states while mining and forest product output is generally steady. Manufacturers report generally good business. Weather is causing problems for cattle ranchers, and hog slaughter has dropped slightly. Consumer spending is guarded; holiday sales were only slightly above 1995. Tourism is mixed. Labor markets remain very tight. Prices other than for energy products show little increase.

KANSAS CITY _ The economy is growing moderately. Manufacturing activity remains fairly strong. Holiday sales were somewhat less than expected. Construction activity edged down. Winter wheat crop remains in good condition and farm finances improved after excellent fall harvest. Labor markets remained tight, leading to some increased wages. Prices are generally stable.

DALLAS _ Economic activity continues to expand. There were more reports of price pressures. Most manufacturing activity is in seasonal lull, except for strong energy-related activity. Retailers were happy but not overwhelmed. Construction and real estate activity were stable. High energy prices kept drilling and oil services activity strong. Agricultural conditions were generally good.

SAN FRANCISCO _ Strong expansion continued in most states. Retailers reported a good holiday season, although weather held down post-Christmas activity. Flooding in Northern California and Nevada caused extensive damage, but repairs are beginning to boost construction. Manufacturing activity is increasing, putting some pressure on wages for skilled workers, particularly in the Pacific Northwest and San Francisco Bay area.

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