The U.S. economy improved in nine of the Federal Reserve's 12 regions in January and February despite snowstorms in the eastern United States, the central bank said Wednesday.
"In most cases, the increases were modest," the Fed said in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. Consumer spending increased in many regions, while commercial real estate and loan demand were "weak" and labor markets "soft."
In the Cleveland region, which includes all of Ohio, the report said the economy "continues to show some signs of improvement, although overall activity remains significantly below prerecession levels." Manufacturing was deemed stable or up moderately, and orders have increased. New home sales improved slightly.
The overall report informs Fed policy makers ahead of their next meeting on March 16. While Chairman Ben S. Bernanke reiterated in congressional testimony last week that the Fed would leave rates very low for an "extended period," Kansas City Fed President Thomas Hoenig, the longest-serving policy maker, wants to eliminate the phrase because the financial crisis is fading.
"Consumer spending improved slightly in many districts since the last survey, but severe snowstorms in early February limited activity in some districts," the Fed said. The Atlanta and St. Louis regions reported "mixed" economies, while the Richmond district said the economy "slackened or remained soft across most sectors" owing to the weather.
Many companies were unable to raise selling prices, even with higher costs for metals and lumber, the Beige Book said.