US outlook 'cautiously positive': Beige Book
Washington, Sept 9, 2009 (AFP) -
The outlook for the US economy has become "cautiously positive" with conditions
stabilizing from the deep recession, the Federal Reserve said in its Beige Book
report Wednesday.
Some areas of the country are seeing firming economic activity, with others
showing improvement, according to the survey of conditions released by the
central bank to be used by policymakers at their September 22-23 meeting.
"Reports from the 12 Federal Reserve districts indicate that economic activity
continued to stabilize in July and August," the Beige Book said.
"Most districts noted that the outlook for economic activity among their
business contacts remained cautiously positive."
The report is consistent with other data suggesting the economy is starting to
emerge from the brutal recession that began in December 2007.
US gross domestic prodict (GDP) shrank at a 1.0 percent pace in the second
quarter after a steep 6.4 percent pace of decline in the first quarter. But
more recent data suggest growth in the third quarter.
The Beige Book said that retail sales, the main driver of economic activity,
were flat in most regions. But the "Cash for Clunkers" trade-in incentives
program boosted traffic and sales for automobiles.
Most regions reported some improvement in residential real estate markets
despite "downward pressure on home prices" in much of the nation. Commercial
real estate demand however was "weak" around the United States, the report said.
Manufacturing was a bright spot, according to the Fed, with improvements in
most regions, consistent with other surveys indicating ramped up industrial
production
Despite signs of stabilization in overall economy, real estate was under
pressure over the summer, according to the Federal Reserve's Beige Book.
Regional reports indicated housing markets remained weak, but there were signs
of improvement. Downward pressure on home prices continued in most areas. As
for commercial real estate, demand for space remained weak. Analysts worry that
commercial real estate loans will be the next credit sector to become a problem
for the banking system.
