Fed: Regional economy grows moderately

Consumer spending in the Fed’s 10th District grew moderately, while residential construction and commercial real estate continued to improve. Concerns surfaced, though, in manufacturing and agriculture.

The 10th District covers western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico.

Most retailers, mall managers and restaurants reported better-than-expected sales, with several citing unusually high traffic due to unseasonably warm weather. Sales are expected to continue to increase in coming months.

Manufacturing activity in the district continued to expand, but at a slower rate than in recent surveys. Many plant managers reported increases in production and new orders, but increases were not as widespread as in the previous survey period. Growth in capital spending slowed from the strong pace of late 2005.

Most home builders reported that starts increased modestly, partly due to favorable weather. Several metro areas could experience a decline in construction in coming months. Several companies noted difficulty in acquiring cement, but most said acquiring materials in coming months would not be difficult.

Agricultural conditions remained mostly unchanged despite persistent drought conditions across most of the district. Lack of moisture is of particular concern to cattle producers, especially in Oklahoma. If dry weather continues through the summer, many producers say they’ll be forced to sell herds and fall back on cash reserves.

The Federal Reserve publishes the Beige Book eight times a year and uses it to help determine monetary policies. The anecdotal report is named for the color of its cover.[[In-content Ad]]