U.S. economy was affected by the severe winter weather from January to early February, but most of the regions saw continued expansion and the outlook remained optimistic, a Federal Reserve report said on Wednesday.
In Fed's latest Beige Book which gauges 12 region's local economy, eight districts reported improved levels of activity, but in most cases the increases were characterized as "modest to moderate".
New York and Philadelphia experienced a slight decline in activity, which was mostly attributed to the unusually severe weather experienced in those regions. Growth slowed in Chicago, and Kansas City reported that conditions remained stable. The outlook among most districts remained optimistic.
Retail sales growth weakened in most districts, as severe winter weather limited activity. Weather was also cited as a contributing factor to softer auto sales in many districts.
Manufacturing activity expanded at a moderate pace in most districts. Several districts reported that severe winter weather had a negative effect on sales and production.
Commercial real estate leasing expanded, while reports on construction activity were mixed. Residential real estate markets continued to improve in several areas, albeit modestly.
Employment levels improved gradually for most districts, and shortages of specialized skilled labor continued to be reported.
Price pressures remained subdued, with the exception of upward cost pressures for some energy and construction products. Wage pressures remained stable for most districts.
The Beige Book is based on economic information supplied by the Fed's 12 regional banks and is released eight times a year to provide a snapshot of the local economy. It is updated about two weeks before each of the Fed's policy-setting meeting.