A US Federal Reserve survey shows severe weather held back economic growth in much of the country from January through early last month. Even so, conditions strengthened in most regions, thanks to slight gains in areas such as employment and commercial real estate.
Eight of the Fed’s 12 regions reported improved activity, according to the Beige Book survey released on Wednesday. The improvement was depicted as “modest to moderate.”
New York and Philadelphia, two regions hard hit by winter storms and freezing cold, reported a dip in activity attributed to the weather. Retail sales, including auto purchases, were depressed. So was manufacturing.
Factories reported power outages and delayed deliveries of supplies during the bad weather.
The Beige Book is based on anecdotal reports from businesses and is to be considered with other data when the Fed meets on March 18 and March 19.
When the Fed meets later this month, it will be the first meeting under the new Federal Reserve Chair Janet Yellen. Last month, Yellen succeeded Ben Bernanke, who stepped down after eight years as chairman.
The widespread expectation is that the Fed will continue paring the monthly bond purchases it has been making to try to keep long-term interest rates low to support the economy.
In an appearance last week to deliver the Fed’s twice-a-year economic report to Congress, Yellen said recent data have pointed to some weaker-than-expected gains in consumer spending and job growth.
She said the Fed would be watching to see whether the slowdown proves only a temporary blip caused by severe weather. Yellen said she was open to adjusting the pace of the Fed’s reductions if the economy should weaken.
A key piece of data likely to influence the meeting will be the release of the unemployment report for last month today. Two months of tepid job growth have raised concerns about whether the economy might be losing momentum.
In January, employers added 113,000 jobs after an even smaller gain of 75,000 in December last year. Both months were far below last year’s average monthly gain of 194,000 jobs.
Last week, the US government estimated that GDP slowed to an annual growth rate of 2.4 percent in the October-to-December quarter last year. That was below the initial estimate of 3.2 percent and the 4.1 percent annual growth rate in the July-to-September quarter.
Many economists think the economy will slow further in the current quarter to a tepid annual growth rate of 2 percent or even less because activity was held back by harsh weather, but economists foresee a rebound once spring arrives, with many forecasting GDP growth for the full year of about 3 percent.