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Economic activity signaled gains in the West last month, Fed report says
Jul 18, 2012 (The Oregonian - McClatchy-Tribune Information Services via COMTEX) --
The West's economy made modest gains last month, according to a Federal Reserve report released today.
The Fed's economic survey, known as the Beige Book, includes a three-page overview of its San Francisco District, which covers nine western states including Oregon.
Many economic indicators showed modest improvements, including retail sales, commercial lending and housing. In fact, the word "modest" (or a form of it) appeared seven times in the district's report.
But businesses still are hesitant to make capital investments. And the semiconductor industry noted weakening future demand.
The San Francisco bank's chief, John Williams, visited Portland Thursday, saying he expects the economy to grow at a frustratingly slow pace. Global economic weakness and domestic policy issues could further threaten growth, he said.
But he noted recent trends in the housing market are a good sign for the economy. His district's report, too, noted gains in the sector.
Among the report's conclusions:
Manufacturing
Overall activity picked up in June. The semiconductor industry pointed to an "emerging softness in demand," although sales remain high.
Finance
Businesses remained cautious to take on more debt, but the volume of commercial and industrial loans edged up. Interest in consumer credit also increased, particularly for auto loans.
Real estate
Housing marked modest improvements as home sales picked up and continued demand for rental units drove new multifamily projects. The commercial real estate sector, too, gained ground and vacancy rates fell.
Earnings
Wages grew in few industries, as the high unemployment rate and weak demand for new workers weighed on earnings. The largest gains were concentrated in the information technology and skilled manufacturing sectors.
Spending
Demand for longer life consumer goods was flat, as TV sales dropped and appliance sales climbed. Luxury sales weakened, but auto sales remained high.
Inflation
Tough competition kept retail prices steady. That's expected to hold true through the rest of the year. Prices dropped for some raw materials, particularly gasoline.
Agriculture
Export growth helped boost crop and livestock sales, but that is likely "on the wane."
--Molly Young; @mollykyoung
___ (c)2012 The Oregonian (Portland, Ore.) Visit The Oregonian (Portland, Ore.)
at www.oregonian.com Distributed by MCT Information Services
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