Fed Says Economy Perked Up Amid Hope for Manufacturing (Bush Recovery)

THE WALL STREET JOURNAL ^ | July 30, 2003 | MICHAEL SCHROEDER

[Pubbie]

WASHINGTON -- The U.S. economy showed signs of a budding recovery in June and early July, led by broad improvement in the long-ailing manufacturing sector, a Federal Reserve survey found.

The central bank said most regions of the country reported an improvement in overall economic activity, with only the Chicago, St. Louis and San Francisco districts showing continued sluggish growth.

"Several districts noted increased optimism about economic prospects in coming months," the Fed said in its "beige book" report, named for the color of its cover.

The survey is a collection of anecdotal reports from business contacts across the country that Fed officials will use in deciding monetary policy at their next meeting, Aug. 12. Most economists expect the central bank to hold its key federal-funds rate at a 45-year low of 1%.

"Nascent signs of a recovery emerged in manufacturing," with 10 of the Fed's 12 districts reporting an end to "an extended period of declines," the central bank said.

Housing sales and starts remained strong across districts, spurred by low mortgage rates, but commercial real-estate conditions remained sluggish. Activity in the services and energy sectors grew somewhat faster in recent weeks.

In contrast, consumer spending remained lackluster, with only New York reporting a noticeable improvement in retail sales. Retailers in the Atlanta, Dallas, New York and San Francisco districts cited heavy discounting and noted that retail prices remained competitive.

Tourism and travel reports were also mixed. In the Chicago district, hotel-occupancy rates were boosted by discounts and economy packages. Boston said that international travel more than doubled from a year earlier, but the report indicated that travel-industry expectations weren't met because activity still trailed the levels of before Sept. 11, 2001.

Prices were generally little changed, though higher health-insurance costs continued to be passed on to employees, some districts reported. Excessive rainfall delayed harvesting and damaged crops in several districts but was credited with alleviating drought conditions in other districts.

The Fed has fretted that the recovery won't get traction until business investment improves, and there remain few signs that is happening.

Capital expenditures in the manufacturing sector remained weak, although several districts reported an increase in investment planned for the future. Atlanta reported that firms remained reluctant to buy new equipment. Kansas City indicated that recent capital spending fell but that planned future investment edged up as optimism about manufacturing prospects remained high. Boston and Dallas noted increases in capital spending for upgrades in hardware and software.

The survey was prepared by the Fed Bank of Richmond and reflects information gathered before July 21.

[Willie Green]

The entire furniture and textile industry is in a freefall state of collapse and the WSJ is claiming an upturn in manufacturing?
Hmmmmph.... either they're trying to buffalo us or someone spiked their drinking water with a hallucinogen.

[Jorge]

The entire furniture and textile industry is in a freefall state of collapse and the WSJ is claiming an upturn in manufacturing?

That's just what the statistics say.
Don't worry.
There's nothing that says you can't keep spreading your negative doom and gloom attitude all over FreeRepublic regardless of how the economic outlook actually looks.

So by all means don't neglect your pursuit of misery and self pity, and meanwhile the rest of us can thank God we have a spirit of hope and graditude for living in the greatest nation on earth.

[blackbirdphleps]

Well since they don't seem to be living on earth why don't we just sell them bottled water and make sure the hallucinogen is in it the bottles so we will all know that it is in it instead of them living in some dream world.

[blackbirdphleps]

If the manufacturing companies are picking up.
Where??????????
It's sure isn't in Oklahoma.
I know of three companies that are closing their doors.
One makes pants, another makes parts for oil field equipement. And the last one builds the large oil tanks that you see moving up and down the interstates.
And I have heard whispers about other companies in Oklahoma that will be closing their doors also.

In the month of August there is going to be over 5,000 people in my area without jobs. And that isn't inculding the ones that coming out of collage or the ones already on unemployment.

It is so bad in Oklahoma we can't even sell sand or rocks.
There is nothing new being built, but why do we need to build new building when we have so many empty buildings?

We still are selling granite. (Head Stones)
It's so bad in our area that we did have a little work for some of the people when a new fence was put up around the cemetary.

People are just dying to get in with their new Head Stones. So we had to put the fence up so they could make a line instead of rushing in.
:-)
The undertakes, lawyers, and the back hole workers are still working hard but every one else is taking a number and fighting over their numbers to get in line.
So the police officers have their hands full keeping the peace.

So if it's picking up it better hurry before the only thing left in Oklahoma is the wolves and bob cats.

[Jorge]

If the manufacturing companies are picking up. Where??????????

Well according the Central Bank and Federal Reserve survey..manufacturing is improving across most of the country.
You think they're lying to us?

[blackbirdphleps]

Well according the Central Bank and Federal Reserve survey..manufacturing is improving across most of the country. well MOST is a big a FOUR letter word. Which country? are they talking about? Are you sure they are talking about the united States? And not the United Nations? Central Bank and Federal Reserve is nice pretty looking words but where do they came from? Where do they call home? Who owns the Central Bank and the Federal Reserve? All banks have people that have so much money in them that they give them a seat on a board cause they want to know where their money is going and have a say what is to be done with their money. So who are sitting on the boards of the Central Bank and Federal Reserve? And why would they spend their their hard earned money of taking a survey? When they don't really care about anyone else but how much money they are racking up. Do I think they are lying to us? What do you think would happen if they told us the survey told them that it's going to get worse. So worse that people are going to be killing each other for a loaf of breed and an egg? Have you been listening to the news? Have you been reading the messages about companies moving out of the United States so they could hire cheaper workers? Do you know of anything in the United States that is still processing the basic needs for a manufacturing company to use to build their products with? Where are the steel beams coming from now days? Where is tin sheets coming? Where is the plastic processing plants at? Now do you think, I think they are lying to us? Cause MOST is a very vague word to be using when so many people are out looking for jobs and worrying about putting food in their children's mouths.

[Choose Ye This Day]

Jorge, tienes razon.

I think you're right. I think things are getting better overall.

My anecdotal 'evidence' that leads me to feel that things are getting better, not worse, comes from my vocation--I go around to different companies in the upper Midwest and enroll employees in their 401(k) plans offered by their employers. This gives me the opportunity to talk with many different types of people (young, old, rich, poor, blue collar, professional, immigrants, owners, management, line workers, etc.) in various types of industries (mostly manufacturing, but also banking, health care, service, etc.). I always ask how workers are doing, how the company is doing, etc. Obviously, every company is different, and every industry is different. But in general, the trends I have seen lately are:

1) Companies that had to lay off this past year are starting to hire them back.

2) Manufacturing orders are finally back up (businesses finally starting to spend again).

3) More employees--especially blue collar workers--are starting to save for retirement and more are increasing the percentage they contribute to their 401(k) (workers now have discretionary income, feel more confident).

4) Compared to one year ago, more employers are offering a match on 401 contributions (increasing benefits) because they feel they are now able to do so--profitable again--and because they want to remain competetive and hang on to good workers, suggesting that they feel unemployment will decline as the economy gears up, and the labor market will get much tighter.

Sure, as I said, this is anecdotal evidence. And maybe it only applies to the upper Midwest; other regions/industries may be suffering more. But the sense of guarded optimism is palpable out there. More people see the light at the end of the tunnel.

[Maria S]

Lots of Indian casinos there, aren't there?

[blackbirdphleps]

Lots of Indian casinos there, aren't there?

The Indians have bingo houses and smoke shops.

Casinos? I know in the smoke shops they had some quarter machines that were pull-tab cards you could buy. But they aren't in the smoke shop any more.
I know Oklahoma banned various machines from being used.
How it affected the bingo houses I have no idea cause I don't like bingo so had no desire to go in and look around.

[dljordan]

Maybe he's just trying to be realistic instead of participating in mindless boosterism. After all, we know the Feds would never lie for political purposes. Right?

[FreeMeansNoID]

I'd love to see some anecdotal evidence that thing's are getting better here in Montana, lumber mills are closing left and right, high electricity rates keeping the aluminum mill closed, and I don't see any thing good coming down the pike.

[Jorge]

Maybe he's just trying to be realistic instead of participating in mindless boosterism

Except that all of his posts happen to be negative and pessimistic, all the time.

No one who has vision and perseverance or has ever done anything with their life keeps company with doomsayers or those who only spread discouragement.

[ETERNAL WARMING]

These people should have to work for a living. LOL

[blackbirdphleps]

LOL
Can you image them out attempting to find a job right now?
LOL