While the Federal Reserve’s latest survey indicates that consumer spending for the year is off to a solid start, the harsh weather conditions in the northeast and the spat on the West Coast ports that slowed down shipments put a dent in the start of 2015.
Particularly in bustling business districts in Boston and New York City, the weather played a factor in consumer spending.
“Both the New York and Boston Districts reported that harsh winter weather negatively affected retail business in their Districts,” the “beige book” said, The Wall Street Journal reported. “However, the Boston and Cleveland Districts also reported increased sales of winter-related items such as winter apparel, rock salt and snow shovels.”
Also highlighted in the beige book, which includes anecdotal factors that may impact economic conditions in particular regions, was indication that businesses are hiring at a steady rate. Overall, the federal report shows “modest or moderate growth,” in the regions it examined, WSJ reported. Outside of major regions, however, “the pace of economic activity was increasing only slightly or slowing.” The report cited wage increase as a good indication toward stronger consumer spending, and it said price tags on goods and services remained relatively flat.
The Feds survey, which took into account activity from the start of the year through Feb. 23, came in time for the Federal Reserve’s meeting in Washington, D.C., later this month. That meeting will largely focus on the state of the labor market.
“Provided that labor market conditions continue to improve and further improvement is expected, the Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when, on the basis of incoming data, the Committee is reasonably confident that inflation will move back over the medium term toward our 2 percent objective,” Federal Chairwoman Janet Yellen told Congress last month, according to WSJ‘s report.
In a related report released last week from the University of Michigan’s Surveys Of Consumers, it was found that February brought a chilling effect to consumer confidence due to rising gas costs and harsh weather — ending the 11-year high since 2004.
“The underlying strength that has kept confidence at high levels has been job gains. While buffeted by harsh weather and lower gas prices, consumers have remained focused on gains in jobs and wages,” said Richard Curtin, chief economist of The University of Michigan’s surveys, in the study news release.