Fed: Shutdown fears put damper on growth
The economy in the Federal Reserve district that includes Pittsburgh continued to expand at a moderate pace from September through early October, as manufacturing and commercial construction grew while retail sales were disappointing.
But the Federal Reserve said Wednesday in its periodic Beige Book report that growth slowed during the reporting period in four key districts — Philadelphia, Richmond, Chicago, and Kansas City — as businesses grew worried about a budget impasse that led to a partial government shutdown. Eight of the Fed's 12 districts reported the same growth rate as they last reported.
Western Pennsylvania is part of the Fourth District, which includes West Virginia's northern panhandle, Ohio and eastern Kentucky. Pittsburgh is the largest metropolitan area in the district, while eight of the 10 largest are in Ohio.
In the district, housing activity leveled out after a six-month period of strong growth, as sales of new and existing homes were above year-ago levels. And new motor vehicle purchases posted robust gains on a year-over-year basis.
“What we're seeing here and nationally is growth in employment, but not at the pace that we would like to see four years into the recovery,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.
The report said hiring was sluggish across industry sectors. Staffing firm representatives reported that the number of job openings increased, with vacancies found primarily in health care and manufacturing. However, job placements were lower.
Faucher said energy production was a positive, as shale drilling picked up in regions rich in wet gas and was above year-ago levels.
Overall, the economy continued to expand at a “modest to moderate” pace, according to the Fed survey.
Businesses around the country remained optimistic about the future and consumer spending continued to increase, helped by strong auto sales. But many businesses noted greater uncertainty because of the federal shutdown, which began on Oct. 1.
Jennifer Lee, senior economist at BMO Capital Markets, said that the Fed's survey showed that there had been only limited damage to the economy at least through the first week of the shutdown.
The Fed's survey will be used by central bank policymakers in their next meeting on Oct. 29-30. Economists believe the Fed will maintain its $85-billion-a-month in bond purchases to offset the effects of the shutdown.
The Associated Press contributed to this report. John D. Oravecz is a Trib Total Media staff writer. Reach him at 412- 320-7882 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- BNY Mellon is putting iconic Citizens Bank Tower up for sale
- Super Bowl ads win by playing to viewers’ emotions, experts say
- Pipeline companies weather downturn in prices of natural gas, oil
- U.S. Steel maps out greater efficiency for 2015
- Pennsylvania shale gas producers received hundreds of environmental citations in 4 years, PennEnvironment says
- Super Bowl draws big increase in first-time advertisers
- U.S. Steel warns it may lay off almost 2,000 workers in Alabama, Texas
- Alibaba ripped in report
- McDonald’s replaces CEO amid sales decline, effort to transform image
- SEC alleges BNY Mellon bribed foreign investors by handing internships to their relatives
- Obamacare enrollment up in Pennsylvania