WASHINGTON – Most parts of the country logged moderate economic growth in the early spring, despite sluggish manufacturing largely due to the housing slump.
The fresh snapshot of the national economy, released Wednesday by the Federal Reserve, found that "manufacturing activity was slow" in many areas and that "residential real estate activity continued to weaken, with sales declining in many districts and flat in a number of others."
Overall, most regions reported "only modest or moderate expansions," the Fed said. There were some exceptions, though. The Minneapolis region reported "firm growth" and the Dallas region characterized economic activity as "moderately strong."
Information from the survey will figure into discussions at the central bank's next meeting on May 9. Many economists predict the Fed will continue to hold a key interest rate at 5.25 percent, where it has stood since last June. Before taking a breather, the Fed had steadily boosted rates for two years to ward off inflation.
On the inflation front, the Fed survey found that "consumer prices remained generally stable, with some districts experiencing only modest price increases."
Still, businesses had to cope with higher prices for fuel and raw materials such as metals. As a result, some manufacturers in the Fed regions of Boston, Cleveland, Chicago and Dallas boosted prices to their customers, the report said.
Federal Reserve Chairman Ben Bernanke and his colleagues have said that the biggest risk to the economy is if inflation doesn't recede as they currently predict. The hope is that inflation will ease as economic growth slows.
So far, the slowing economy hasn't derailed the jobs market.
The Fed survey found that businesses in most regions reported strong demand for workers, especially for those with certain skills. However, workers for the most part saw modest wage gains, the report said.