The U.S. economy notched modest growth across all regions as consumer spending picked up amid improving weather conditions, according to a Federal Reserve report that touted strong new vehicle sales but signaled residential real estate activity was shaky.
All 12 Federal Reserve Districts reported economic activity expanded during the current period, the Fed said in its Beige Book report on Wednesday. New-vehicle sales were a bright spot: increasingly strong in more than half of the districts, with most other regions posting steady demand. That sector had been stung earlier this year when customers put off purchases due to the poor winter weather.
The Fed’s report also showed strength in several other pockets of the economy: Lending activity has increased, non-auto retail sales grew moderately, and labor conditions generally strengthened. Tourism, another bright spot, was “steady to stronger” across most of the country.
The mostly bullish tone of the report contrasts with some disappointing data earlier Wednesday. U.S. first-quarter productivity was the weakest it’s been in six years, according to the Labor Department, while Automatic Data Processing reported U.S. private-sector employers added a smaller-than-expected 179,000 jobs last month.
The Fed did report residential real estate activity was mixed. Low inventories constrained sales, specifically in the Boston, New York, and Kansas City districts. Still, home prices continue to climb across much of the country, and the markets for condos and apartment rentals remain robust. Some recent housing data has suggested the housing market’s recovery has stalled in the U.S.–a concern that picked up during the severe winter. The slowdown is worrisome for the industry as it heads into the key spring and summer selling season. Still, the Fed on Wednesday wasn’t too downtrodden about the housing sector.
“Both non-residential construction activity and commercial real estate markets were generally steady to stronger since the last report,” the Fed said.
The Fed’s so-called Beige Book is a report that is issued eight times a year and is a summary of anecdotal information on current economic conditions gathered by each Federal Reserve Bank. The report then summarizes that information by district and sector.
On the job front, the report said hiring activity was steady to stronger across much of the country, with several districts reporting a shortage of skilled workers. But wage increases have remained generally subdued, and two districts reported an increase in health-benefit costs.