Economy Watch: Fed Says Economic Still Expansion ‘Modest to Moderate’
By Dees Stribling, Contributing Editor
On Wednesday the Federal Reserve released its latest Beige Book, more formally known as the “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” which said that “economic activity generally expanded at a modest to moderate pace since the previous Beige Book,” but—and this is a fairly large but—”many Districts noted rising gasoline prices and fiscal policy as having a negative effect on consumer sales.”
Commenting on real estate, the Beige Book observed that residential real estate activity continued to strengthen in most districts, although the pace of growth varied. The Boston, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco districts noted strong growth in home sales, while New York and Chicago reported only slight improvements.
Home prices edged higher in the majority of districts, with lower inventories generally cited as the primary cause. Overall commercial real estate conditions were mixed or slightly improved in most districts, the book said. Commercial development and leasing activity increased in the San Francisco Bay and Seattle markets, fueled by sustained growth in the technology sector, and other markets—such as Chicago—saw an uptick in demand for manufacturing space construction.
Bankruptcy filings drop
Total U.S. bankruptcy filings decreased 21 percent in February compared with the same month a year ago, according to the American Bankruptcy Institute on Wednesday, citing data provided by Epiq Systems Inc. Bankruptcy filings totaled 82,285 in February 2013, down from 104,537 last year. Personal filings declined as well, by 21 percent year-over-year, to 78,611 in February 2013.
The most recent peak in personal bankruptcy was in 2010, when 1.54 million petitions were filed. In 2012, the total was down to 1.22 million nationwide, and if the current rate holds, the number will be about 1 million this year. That’s down from the recession, but still somewhat higher than a “normal” year’s worth of bankruptcies, which sees about 800,000.
“The post-recession trends of reduced consumer spending, low interest rates and tighter lending standards continue to be reflected in fewer bankruptcy filings,” ABI Executive Director Samuel J. Gerdano noted in a press statement. “As these trends persist, expect bankruptcy filings to continue to decline in 2013.”
ADP says nearly 200k jobs created in February
Automated Data Processing said in its National Employment Report, which was released on Wednesday in collaboration with Moody’s Analytics, that private sector employment increased by a net of 198,000 jobs from January to February. The January 2013 report was revised upward by 23,000 to 215,000 jobs. ADP is sometimes more-or-less in agreement with the Bureau of Labor Statistics employment numbers that come out on the first Friday of the month, but at other times it diverges significantly from the BLS calculations.
“The job market remains sturdy in the face of significant fiscal headwinds,” Mark Zandi, chief economist of Moody’s Analytics, noted in a press statement. “Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don’t appear to be affecting the job market.”
Wall Street moved up only slightly on Wednesday, but even so that’s another record high for the Dow, which gained 42.47 points, or 0.3 percent. The S&P 500 was up 0.11 percent but the Nasdaq declined 0.05 percent.