WASHINGTON — The U.S. economy improved in nine of the Federal Reserve's 12 regions in January and February while being hampered by snowstorms in the eastern United States, the central bank said Wednesday.
"In most cases the increases were modest," the Fed said in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. Consumer spending increased in many regions, while commercial real estate and loan demand were weak and labor markets soft, the Fed said.
The report informs Fed policy makers ahead of their next meeting on March 16. While Chairman Ben Bernanke reiterated the Fed would leave rates low for an "extended period" in congressional testimony last week, Kansas City Fed President Thomas Hoenig, the longest-serving policy maker, wants to eliminate the phrase because the financial crisis is fading.
"Consumer spending improved slightly in many districts since the last survey, but severe snowstorms in early February limited activity in some districts," the Fed said. The Atlanta and St. Louis regions reported mixed economies, while the Richmond district said the economy "slackened or remained soft across most sectors" owing to the weather.
Wednesday's Beige Book reflects information collected on or before Feb. 22 and summarized by staffers at the Kansas City Fed.
The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, the most in six years, as the country recovers from the worst recession in decades.
While payroll reductions slowed in most areas, "hiring plans still remained generally soft," and pressures on employers to raise wages were minimal, the Fed said.
Economists surveyed by Bloomberg News anticipate a government report Friday will show U.S. payrolls declined by 63,000 in February, in part because snowstorms caused some businesses to close. The jobless rate probably increased to 9.8 percent from 9.7 percent, based on the median estimate, remaining close to a 26-year high.
The U.S. has lost 8.4 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. A private report Wednesday said U.S. companies last month cut 20,000 jobs, the fewest in two years, according to data from ADP Employer Services, following a revised 60,000 drop the prior month.