ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, August 8, 1996 TAG: 9608080088
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
Economic growth cooled in Virginia, other Mid-Atlantic states and the rest of the United States in late June and July, the Federal Reserve said Wednesday.
That probably means consumers and businesses can continue to borrow money at current rates for at least the near future, analysts said.
Analysts have disagreed whether the Federal Open Market Committee would boost short-term interest rates to slow the economy and keep inflation at bay. They now see a rate increase as less likely because economic growth is leveling on its own.
The central bank's Beige Book report, a summary of economic conditions published eight times a year, may foreshadow action at the committee's next policy meeting Aug. 20.
The cooling off did not come at the expense of Mid-Atlantic retailers, who enjoyed steady sales. Manufacturing shipped fewer goods, however, home sales were sluggish, and ports handled fewer imports, the Federal Reserve Bank of Richmond said. The report also covers Maryland, the Carolinas and West Virginia.
Tourism grew despite Hurricane Bertha's effects on the East Coast.
``The Olympics have clearly attracted large numbers of tourists to the Atlanta area, and other parts of the district have benefited as well. Large numbers of Atlanta residents reportedly visited Florida during the Games,'' the report said.
Also today, Commerce Department figures showed that inventories of goods at the nation's wholesalers were changed little in June, a sign that manufacturers could be poised to increase production to meet consumer demand.
On the inflation front, even though shortages of entry-level workers persisted, ``wage pressures remained subdued,'' the Fed's report said. ``Despite scattered reports of rising commodity prices, most districts report that both input prices and costs of finished goods were, on balance, flat.''
The Conference Board's index of leading indicators - designed to predict U.S. business activity over the next half year - advanced 0.5 percent in June to the highest level on record.
The Associated Press and Bloomberg Business News contributed to this report.
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