Archive for Thursday, July 31, 2003

Survey indicates economy improving

July 31, 2003


— America's economy, which has been poking along, displayed fresh signs of gaining momentum in June and the first half of July, the Federal Reserve said Wednesday in its latest snapshot of U.S. business activity.

Most of the Fed's 12 districts that were surveyed suggested stronger growth in their regions.

"Consistent with the generally more positive assessments of current economic activity, several districts noted increased optimism about economic prospects in coming months," the report said.

Three districts -- Chicago, St. Louis and San Francisco -- characterized economic activity as sluggish. Atlanta described business conditions as mixed.

The survey of business conditions will help Fed policy-makers when they meet on Aug. 12 to set interest rates. The survey suggested the economy flashed more signs of life since April and May, the period covered in the Fed's previous survey.

Although that survey hinted that the economy was on the verge of a revival, the Fed decided to give the recovery a little push. Fed policy-makers on June 25 cut a key interest rate by one-quarter of a percentage point to 1 percent, a 45-year low.

But with scattered signs that the economy may be seeing better days ahead, analysts believe the Fed probably will hold short-term interest rates steady at next month's meeting.

Federal Reserve officials in the Kansas City district said the area's economy improved somewhat in June and July.Fed officials cited an increase in retail sales and manufacturing activity, both of which were above year-ago levels, according to the Fed's latest economic report released Wednesday.Commercial real estate activity, though, remained sluggish in the area, with most real estate agents predicting excess office space would remain in the market for at least another year and a half.

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