The anecdotal snapshots from the Fed district banks help the FOMC evaluate the economy prior to its next meeting. Policy makers plan to meet April 30-May 1 in Washington.
While housing and auto sales are bright spots this year, retail sales declined in March amid across-the-board federal budget cuts known as sequestration. Tax increases have also taken a toll on demand.
“Continued modest growth right now is most likely,” said Josh Feinman, the New York-based global chief economist for DB Advisors, the Deutsche Bank AG asset manager overseeing $228 billion, and a former Fed senior economist in Washington.
Fed officials are debating when to curtail their unprecedented bond buying. Several FOMC members said at their March 19-20 meeting that the Fed should begin tapering its quantitative easing program this year and stop the asset purchases by year end, meeting minutes released April 10 showed.
FOMC members “thought that if the outlook for labor-market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end,” according to the record of the gathering.
That was before a Labor Department report showing the pace of job growth in March fell from 268,000 a month before. The unemployment rate slid to a four-year low of 7.6 percent as the workforce participation rate slumped to 63.3 percent, the lowest since 1979.
Fed policy has helped shore up demand. Cars sold at an average 15.3 million annualized rate in the first quarter, the most since the same period in 2008, according to Ward’s Automotive Group data.
Housing has gained as Fed easing pushed mortgage rates to record lows. The S&P/Case-Shiller index of property values in 20 cities climbed 8.1 percent in January from a year earlier, the most since June 2006.
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