Economic Conditions Are Improving Slightly and Unevenly, Fed Surveys Say
WASHINGTON -- Economic conditions are improving in most of the nation, but the rate of gain continues to be relatively small and uneven, according to new surveys by the 12 Federal Reserve district banks.</br></br>Overall, 10 of the districts, in their report for November, noted slight to moderate gains in some or all sectors of the economy. Retailers in particular said activity had picked up in October and early November, and many were optimistic about the current holiday season. The Chicago district went so far as to call it "the best performance in eight years."</br></br>Badly battered consumer confidence also seemed to be on the mend in many areas, a trend that respondents in Boston and Chicago linked to the end of the presidential election campaign. In New York, however, retailers attributed the somewhat brighter picture to promotional efforts rather than to any meaningful revival in the economy.</br></br>Manufacturers in about half of the Fed districts said things are looking up, albeit generally quite modestly. Ongoing cutbacks in the defense industry remain a drag on the recovery in some regions. And while indicators from Dallas are strong, and Boston, Philadelphia, Cleveland and Chicago reported small gains, many industrial concerns in the New York district and California continue to experience weak demand.</br></br>Construction and real estate remain "a tale of two markets," the report said, with improvements in the residential sector and continued stagnation on the commercial side. In Southern California, for example, some commercial rents have fallen 25% to 40%, and forecasts for next year show rents tumbling an additional 10% or more; the number of foreclosures is expected to rise.