Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, November 3, 1994                   TAG: 9411030079
SECTION: BUSINESS                    PAGE: B-10   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON                                  LENGTH: Medium

FED FINDS PRICE PRESSURES BUILDING ON THE WHOLESALE FRONT

U.S. producer prices are continuing to rise, leading to increased reports of manufacturers passing along those higher costs in their selling prices, the Federal Reserve said Wednesday in its Report on Current Economic Conditions.

However, most Fed districts are reporting no change in retail prices, although ``pressure is building in some districts,'' the Fed said.

The report - called the ``beige book'' for the color of its cover - said economic activity continues to expand in all areas of the country, with signs of economic acceleration in the agency's Chicago, Dallas, Minneapolis and Philadelphia districts.

In its previous beige book, released Sept. 14, the Fed said competitive pressures were keeping retail prices stable, but increases were noted in manufacturers' prices for raw materials. In that report, the Fed said economic expansion continued, but growth in some areas had moderated.

The Fed beige book is released every six weeks, shortly before the policy-making Federal Open Market Committee meets. The next meeting is scheduled for Nov. 15. Wednesday's report was prepared by the Dallas Fed based on information obtained from the 12 Fed districts before Oct. 25.

The report noted that labor markets around the country are ``tight or tightening,'' at least in certain sectors . However, there are ``few reports of rising wages,'' it said.

Consumer activity remains strong, with many districts reporting increased spending, although several reported flat or slackening retail sales.

Manufacturing activity increased in nearly all the Fed districts, and demand for business services has accelerated. Auto sales also are strong, the Fed said.

Construction of single-family homes has declined from fairly high levels across much of the country, although commercial real estate activity is increasing. The Fed said loan demand is ``advancing at a healthy pace in most districts.''

In the agricultural sector, better-than-expected crop yields have added to record crop and livestock production across the nation, with large supplies pushing the price of agricultural commodities down.

Additionally, ``energy activity has improved, despite relatively weak oil and natural gas prices,'' the beige book said.