Sales growth at Home Depot Inc., the largest U.S. home- improvement retailer, will be buoyed by about 2% economic growth and a “warming-up housing market,” this year, Senior Vice President Kevin Hofmann said at an investor conference March 4. “The housing market -- while it’s recovering -- we don’t expect a full recovery in 2013,” he said.
The Fed said inflationary pressures were “modest” and “most district contacts did not plan to increase prices.”
“The majority of districts reported modest improvements in labor market conditions, although hiring plans were limited in several districts,” the report said. “Wage pressures were mostly limited, but some contacts reported upward pressure for skilled positions in certain industries due to worker shortages.”
The anecdotal accounts were collected on or before Feb. 22 and compiled by the Federal Reserve Bank of Kansas City.
Minutes from the Jan. 29-30 FOMC meeting show officials were divided over the bond buying. Several participants at the gathering “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” the minutes showed.
Chairman Ben S. Bernanke defended the Fed’s bond purchases in congressional testimony last week, saying the benefits of reducing borrowing costs and fueling growth outweigh any potential costs.
The Fed chairman said in a speech last week that “premature removal of accommodation” may weaken the three-year recovery. Vice Chairman Janet Yellen, the Fed’s No. 2 official, said in a speech in Washington this week that ending the bond- buying too soon could damp growth. Policy makers are tracking possible costs and risks from the record accommodation, she said.
Fed purchases of mortgage bonds and Treasuries helped push the Dow Jones Industrial Average to a record yesterday, erasing losses from the financial crisis after a four-year rally that was also fueled by the fastest corporate profit growth since the 1990s. The Dow rose 0.3 percent to 14,292.40 at 1:53 p.m. in New York.
The FOMC cut its target interest rate to a range of zero to 0.25% in December 2008 and has said it will keep the rate in that band as long as unemployment remains above 6.5% and inflation is projected to be no more than 2.5%. The committee at its January meeting said it will continue asset purchases until the labor market improves “substantially.”
During the fourth quarter, the economy grew just 0.1% amid the biggest drop in defense spending since the closing years of the Vietnam War.