Federal survey upbeat on growth, jobs

Thursday June 7, 2012

WASHINGTON (AP) -- The U.S. economy grew moderately in most regions of the country this spring and companies kept hiring, according to a Federal Reserve survey released Wednesday

The mostly upbeat survey offered a hopeful sign after last week’s more dismal data on hiring and manufacturing. Those reports sketched a picture of an economy that is slumping after a promising winter.

The positive survey, which is anecdotal, also makes it less likely that Fed policymakers will take further action in the coming months to lift the economy. The survey doesn’t suggest the economy is in dire need of help, many economists said.

"This report was more upbeat than probably anyone expected," said Jennifer Lee, an economist at BMO Capital Markets. That suggests that "some of the soft reports on payrolls, auto sales, and manufacturing may be temporary."

The Fed survey shows growth in each of its 12 bank districts from April 3 through May 25. Growth picked up in 10 districts. It was steady in the Boston district, which includes all of New England, and slowed in the Philadelphia region, which includes Delaware, New Jersey and parts of Pennsylvania.

Hiring was steady or rose modestly, according to the Fed’s report, known as the "Beige Book." That’s in stark contrast to the government’s jobs report last week, which said U.S. employers added just 69,000 jobs in May, the fewest in a year.

"We are encouraged by the overall tone ... because it suggests that business contacts are not experiencing a sharp drop-off in activity amid the heightened economic uncertainty of late," Joseph LaVorgna, an economist at Deutsche Bank, said in a note to clients.


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