Economy shows modest growth in April, May

The report covered the Federal Reserve’s 10th District, based in Kansas City and including Springfield and southwest Missouri.

Consumer spending in the district was up as most retailers, mall managers and restaurants reported increased sales since the previous survey. However, there was a modest negative impact from high gasoline prices. Apparel sales were particularly strong, while home item sales were weak at many stores.

Motor vehicle sales were flat compared to the previous survey and slightly weaker than a year ago. Sales of large sport utility vehicles and trucks were weak, while small and more fuel-efficient models sold well.

Travel and tourism activity continued to improve. Hotel occupancy rates in some locations were at the highest levels in several years, and most hotel and resort operators were optimistic about summer travel activity.

Manufacturing activity was largely stable in late April and May following two years of expansion. Factory activity generally is well above year-ago levels, despite reports of little growth in production and employment since the previous survey.

Bankers report that loans edged up and deposits decreased slightly since the last survey. Demand rose slightly for commercial and industrial loans and commercial real estate loans but edged down for consumer loans.

Residential real estate activity remained solid in late April and early May, and commercial real estate activity improved slightly. Home starts were generally unchanged since the previous survey and down from year-ago levels, although numbers are still high by historical standards.

Named for the color of the cover, the Beige Book is issued eight times a year. It is a collection of anecdotal information compiled primarily from various business and community leaders, providing a snapshot of how the economy is doing.

The Federal Reserve’s 10th District includes western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico.

Beige Book reports for all districts are available online at www.federalreserve.gov.