Economy grew in all 12 districts in May and June

July 16 00:24 2015

The U.S. economy gained momentum in May and June on a pickup in consumer spending and the housing market, but the strong dollar and pullback in oil drilling continued to hamper manufacturing, the Federal Reserve said Wednesday. The Fed’s “beige book,” named for the color of its cover, generally painted a more upbeat picture of the economy than its previous report. Seven Fed regional bank districts — Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas and San Francisco – posted moderate economic growth, up from just four in the last summary.635658913033013115-AP-ECONOMY-GDP-72666340

The economy expanded modestly in other areas, including New York, Philadelphia and Kansas City. Still, all 12 districts reported expansion and several key regions voiced optimism about future growth. The report, an anecdotal snapshot of business conditions around the country, is consistent with economists’ projections that the economy rebounded solidly in the second quarter after shrinking early in the year. Many analysts expects the economy to grow a solid 3% or so and annual pace in the second half of 2015.

Consumer spending advanced across the country from mid-May through June, with low gasoline prices stoking outlays in Philadelphia, Cleveland and San Francisco. But a strong dollar, which makes imports cheaper for U.S. consumers, impeded sales in border areas. Auto sales, however, were generally strong and buyers shifted from cars SUVs in the Cleveland, Chicago and Kansas City, a trend that has been fueled by low gas prices. Tourism also was a bright spot, though it slowed further in New York, normally a popular destination for summer travelers.

The housing market also continued to improve after the harsh winter curtailed home sales and construction. Home sales rose in most districts, including Boston, Cleveland, Atlanta, Chicago and Minneapolis. But sales were mixed in Philadelphia and Dallas and fell in some New York markets. Low inventory discouraged buyers several markets. Meanwhile, single-family housing starts picked up in Cleveland, Atlanta and Kansas City and were mixed in Richmond, St. Louis and Minneapolis. Multifamily building continued to largely support the market, with construction strong in New York, Richmond, Atlanta, Dallas and San Francisco.