“Overall price inflation was modest,” the Fed said. “However, contacts in many districts commented on rising transportation costs due to higher fuel prices.”
Retail spending reports were “positive,” and professional business services “showed modest to strong growth,” according to the report.
Service industries in the U.S. grew in March, capping the strongest quarter in a year and indicating the world’s largest economy will keep generating jobs, according to the Institute for Supply Management’s non-manufacturing index last week.
That index fell to 56 from a one-year high of 57.3 in February, the Tempe, Arizona-based group’s data showed April 4. Since mid-2011, the industries that account for almost 90 percent of the economy have outpaced gains in manufacturing, which had been at the forefront of the two-year expansion.
“The economy is beginning to pick up a little steam,” Mark Lemond, president and chief executive officer of Shoe Carnival Inc., said in a March 21 conference call. “When the customer has money in their pocket, they’re definitely willing to spend it. This bodes well for the rest of 2012 and beyond.”
U.S. stocks advanced today, snapping a five-day decline for the Standard & Poor’s 500 Index, after Alcoa Inc. reported an unexpected first-quarter profit. The S&P 500 increased 0.9 percent to 1,371.11 at 2:21 p.m. in New York. The benchmark measure for American equities had fallen 4.3 percent over the past five days. The 10-year Treasury yield rose to 2.03 percent from 1.98 percent yesterday.
More insight into the Fed’s response to the data may come this week when policy makers discuss the economic outlook. Vice Chairman Janet Yellen will speak tonight in New York, and William C. Dudley, president of the Federal Reserve Bank of New York, is scheduled to speak tomorrow in Syracuse, New York.