At the same time, regional reports offered a mixed picture for March. The Federal Reserve Bank of New York’s so-called Empire State gauge showed manufacturing in the region grew for a second month, and the Federal Reserve Bank of Philadelphia’s factory index indicated growth. The MNI Chicago Report’s business barometer fell to the lowest level of this year.
As part of the attempt to rein in the federal budget deficit, the government began across-the-board reductions in spending on March 1. About $85 billion of those will occur in this fiscal year.
Federal Reserve policy makers have said they’re concerned the fiscal restraint may impede the expansion’s progress. The economy cooled to a 0.4% annual rate in the final three months of 2012, after growing at a 3.1% pace in the third quarter.
United Technologies Corp., the maker of Pratt & Whitney jet engines and Otis elevators, is among businesses projecting economic growth will improve.
“The U.S. economy is better and it is going to continue to get better,” Gregory Hayes, chief financial officer of the Hartford, Connecticut-based company, said at a March 14 analyst meeting. “We’ve got another year-and-a-half or so probably of low interest-rate environment, which we could hope to capitalize on.”
Consumer spending climbed in February by the most in five months, even in the face of a two percentage-point increase in the payroll tax. Growth in hiring is one reason for the pickup.