US economy shrugs off severe weather headwinds

The U.S. economy has emerged from the severe winter weather with business activities picking up in most of the regions, a survey by the Federal Reserve showed Wednesday. In the Fed's latest Beige Book which gauges 12 regions' economy in the past two months, ten districts showed "modest or moderate" expansion, while Cleveland and St. Louis reported declines. Chicago reported that growth had picked up, while New York and Philadelphia indicated business activity had rebounded from weather-related slowdowns earlier in the year. The latest report confirmed Fed's view in early March that the U.S. economy was affected by the severe winter weather from January to early February, but the outlook remained optimistic. The Fed releases the Beige Book eight times a year to provide a snapshot of the local economy and updates it two weeks before each of its monetary policy meeting. The Fed's policymakers will meet on April 29 to decide weather to continue scaling back the bond purchase as the economic recovery is on an increasingly solid footing. Consumer spending increased in most districts, as weather conditions improved and foot traffic returned. The transportation sector generally strengthened with higher port volumes and increased trucking. Manufacturing improved in most districts, and several of them reported the impact of winter weather was less severe than earlier this year. Housing prices rose modestly and inventory levels remained low. Residential construction increased in several regions, and commercial construction also strengthened. The labor market conditions were mixed but generally positive. Employers in New York, Cleveland, Richmond, Chicago, Kansas City and Dallas reported difficulty finding skilled workers. In most districts, wage pressures were generally portrayed as contained or minimal. Prices were mostly steady, with scattered reports of increases. Janet Yellen, chair of the Federal Reserve, said Wednesday that the Fed's current outlook for continued, moderate growth is little changed from last fall, and a significant part of the recent softness was weather related.