ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, June 20, 1996 TAG: 9606200059
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: FROM STAFF AND WIRE REPORTS
As Federal Reserve policy-makers prepared to consider interest rate changes, they were told Wednesday that economic growth remains modest with little sign of inflation at the consumer level.
``Reports from the 12 Federal Reserve districts suggest economic activity continued to advance at a moderate pace in May and early June,'' said a survey of regional business conditions. ``Nearly all districts report expanding activity, and several indicate the pace of growth accelerated recently.''
The survey found little evidence of rising retail prices, despite increases for raw and intermediate goods spotted in some districts.
In the Mid-Atlantic region that includes Virginia, the economy grew at an average pace, the Fed in Richmond said. The survey is intended to help Fed monetary policy-makers when they meet July 2-3 to consider changing short-term interest rates.
Some analysts believe the Federal Open Market Committee will raise rates to slow the expansion and defuse any inflation. Others, however, predcited the committee will wait to learn more about the direction of the economy.
The Mid-Atlantic report said golf and skeet-shooting vacation packages at mountain resorts drove the tourism business to more robust growth, while retailers posted faster sales growth and hired employees faster as a result.
Manufacturers reported stepped-up activity, but those from Virginia decried a lack of skilled labor, which had hampered production.
Demand rose for temporary workers; most in demand were people to perform light factory work and be customer service operators.
Homes sold at a faster clip, but their prices rose, due in some cases to the effect of higher fuel prices on lumber and concrete. The commercial real estate industry saw continued brisk leasing and an increase in construction to offset shortages of some buildings.
Growers saw more favorable conditions, except where scattered freezes hurt fruit crops.
The survey found retail sales had strengthened in all districts except Boston and New York. Manufacturing also improved generally. although there were ``pockets of weakness'' in Cleveland, Atlanta and St. Louis.
The service sector generally continued to expand, the report showed. Tourism remained robust, including in Georgia, where ``the approaching Olympic Games have apparently boosted passenger traffic at Atlanta's Hartsfield International Airport.''
Most districts continued to report tight labor markets.
LENGTH: Medium: 54 linesby CNB