Beige Book Sees Modest Growth

Washington, DC, April 25, 2007--Economic growth in much of the U.S. was modest between the end of February and mid-April, while prices were generally stable, the Federal Reserve said on Wednesday.

"Most Federal Reserve districts noted only modest or moderate expansion in economic activity since the previous report" on March 7, the Fed said in its Beige Book summary of economic conditions.

The Beige Book is based on reports by the 12 regional Federal Reserve banks. This time it was assembled by the St. Louis Fed with information collected up to April 16, and will be used at the next meeting of the Fed's policy-setting Federal Open Market Committee on May 9.

The Fed has acknowledged greater uncertainty in recent weeks about the outlook for both growth and inflation. Over the next two weeks, policy-makers will receive several waves of fresh economic information to consider at their meeting.

Fed banks reported tight labor markets, especially for skilled workers. Some districts experienced wage increases, modestly higher consumer prices, and higher prices for materials used in production, particularly metals and raw materials.

A number of districts noted higher fuel and energy prices.

"Consumer prices remained generally stable, with some districts experiencing only modest price increases," the Fed said. "Most districts, however, reported rising prices for inputs and energy."

In response to higher prices for materials used to make products, some manufacturers in the Boston, Cleveland, Chicago, and Dallas regions were able to raise prices for goods they sold, the Fed said.

Residential real estate markets and home building continued to decline in many districts, the Fed said. Meanwhile, commercial real estate markets were active and commercial construction expanded.