Fed: signs that recession easing, US mood improving

Uptick in home sales and improved manufacturing outlook are among the positive signs in bank's 'beige book.'

Charles Krupa/AP
The sale of this home in Newport, R.I., was pending last week. Eight of the12 Federal Reserve districts reported an uptick in home sales for April andearly May, according to a Fed assessment released Wednesday.

The US economy may not have turned a corner yet, but Americans' mood seems to have improved.

That's the assessment of the Federal Reserve in its latest take on the economy, published in its "beige book," which was released Wednesday. The report – based on findings from the Fed's 12 district banks – painted a picture similar to other recent reports showing an economy declining at a slower rate than in the first quarter of 2009.

"Contacts from several Districts said that their expectations have improved, though they do not see a substantial increase in economic activity through the end of the year," the Fed's report concluded.

Among the more positive signs:

•Manufacturers' outlook had improved despite falling sales.

•Eight districts reported an uptick in home sales, partly based on seasonal factors but also due to lower prices and interest rates. Much of the increase was in the lower end of the housing market.

•Seven districts said new-home construction had stabilized. The Kansas City, Mo., district reported an increase.

In particular, the Richmond, Va., district, covering the area from Maryland to South Carolina, reported a number of positive events, including: better sales activity for a number of manufacturing industries; higher demand for information-technology workers; higher import/export activity; a rise in resort bookings; and a slowing in the deterioration of credit quality among borrowers.

Nevertheless, these positive signs were laid against a background of economic conditions that "remained weak or deteriorated further during the period from mid-April through May," the report said. Among the gloomier signs: "Labor market conditions continued to be weak across the country, with wages generally remaining flat or falling."

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