The US economy remained weak in the past two months with some signs it was beginning to rebound from the first recession in a decade, the Federal Reserve's latest survey of regional economic activity said.
"While there are still indications of caution, there are also scattered reports of improvement," said the report, commonly known as the "beige book."
The recession that began in March shows signs of ending by June, the report said, citing evidence gathered from the Fed's 12 regional banks. That may signal that Fed policy-makers are close to ending a yearlong series of reductions in the benchmark US interest rate.
"Many districts indicate that their contacts believe a recovery will begin by midyear or earlier, but the timing and strength are uncertain," the report said.
As a result, "that uncertainty has led some businesses to budget conservatively for the first quarter."
Retail sales "picked up in late December and early January but for the period overall posted generally weak results," the report said.
Consumers benefited from "aggressive promotions and unusually large discounting that reduced profit margins for retailers."
Manufacturing "was weak or down in most reports, but showed signs of stabilizing or rebounding," the report said.
In some areas manufacturers had "increases in new orders" during the period, the report said, but the employment situation "remained soft."
"There are numerous reports of shrinking wage and benefit packages," it said, and some employee benefits have been cut.
Housing "continued to hold up in most districts, although there were pockets of weakness" such as higher-price homes, the report said. The commercial real-estate markets "were softer" because of rising vacancy rates, it said.
Prices were declining for most goods and services except security, health care and insurance, it said. Energy costs, though higher than a year earlier, fell during the period, and "firms have reduced or eliminated energy surcharges" in at least one region, it said.
The beige book was compiled by the Fed Bank of Dallas and was based on information collected before Jan. 9. The report -- a collection of anecdotes reported to the regional Fed banks from businesses -- gives central bankers and idea of economic developments beyond what statistics show.
The central bank's rate-setting Open Market Committee next meets on Jan. 29-30. At the last meeting, on Dec. 11, central bankers cut the benchmark overnight bank lending rate by a quarter percentage point to 1.75 percent, the lowest in 40 years.
In their deliberations, Fed policy makers consult the beige book and other confidential documents on the economy and potential policy actions.
Investors are betting there's about a 50-50 chance of an additional quarter-point cut at the end of the month, judging by trading in federal funds futures contracts. The fed funds future for February, tied directly to the next meeting, has an implied yield of 1.64 percent, 11 basis points below the current target rate. A Commerce Department report yesterday showed signs that consumers are helping limit the depth of the recession.
Retail sales fell 0.1 percent last month, reflecting declines at auto dealers and cheaper gasoline, while business increased at electronics, department and furniture stores. Sales grew at an 11.3 percent annual rate in the fourth quarter, the strongest since the first three months of 2000.
Better-than-expected sales at retailers suggest that consumers were optimistic enough to keep shopping.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary