Chicago Fed Says Economic Growth Picking Up

By Kevin Robinson in News on Dec 2, 2010 1:30PM

A new survey by the Federal Reserve Bank says that economic growth has picked up in 10 of the central bank's 12 regions. Five regions, including Chicago, Kansas City, Minneapolis, New York and Richmond, experienced economic activity at a "somewhat stronger" pace, while five other regions, including Atlanta, Boston, Cleveland, Dallas and San Francisco experienced a "slight to modest" pace of economic activity. Only Philadelphia and St. Louis showed mixed business conditions.

The report, based on anecdotal information, cited improved hiring, expanded manufacturing production and increased consumer spending as factors to that growth. "The economy is on the rebound from the stumble in the second quarter of 2010, but we’re heading toward a path where it’s fairly modest,” Michael Dueker, a former St. Louis Fed economist told Bloomberg. The U.S. “is in the midst of a really long flat spot in the unemployment rate.”

The Chicago Region report, which covers Iowa, Wisconsin, Michigan and parts of Illinois and Indiana, saw economic growth increase at a rapid pace, with consumer spending boosted by essentials, including heavily promoted and discounted clothing, electronics and appliances. Durable good manufacturers saw strong gains, especially among fabricated metals and auto parts, although steel production remained weak. The region's strong and early harvest boosted farm earnings, and the region's corn and soybean harvests were the third and second largest, respectively.

November's Fed report was stronger than Octobers, with stronger growth and increased hiring across regions. And while prices "were fairly stable across Districts," crop prices and farmland values have increased, allowing for more investment in farm implements and equipment.