WASHINGTON, March 2 (UPI) -- The U.S. Federal Reserve's Beige Book report Wednesday said economic growth in its 12 districts was "modest to moderate" at the start of the year.
"Overall economic activity continued to expand at a modest to moderate pace in January and early February," said the report that is issued eight times a year.
The Fed said retail sales increased across the board, except in the Richmond and Atlanta districts, although severe winter weather slowed retail growth in the Northeast corridor and in Kansas City and Atlanta. Tourism improved in Richmond, Atlanta and San Francisco, but hotel occupancy rates declined in New York and Kansas City.
St. Louis was the only district left behind in an expansion in manufacturing, the Fed said, but the housing market continued to slump. "Residential real estate varied, but overall sales and construction remained at low levels across all districts," the report said.
The Beige Book steers away from hard numbers. In the central bank's meeting minutes for a late January meeting, the Fed projected economic growth for the year at 3.4 percent to 3.9 percent. In November, the Fed pegged growth for the year at 3 percent to 3.6 percent.
The Fed's projection for employment was largely unchanged in the January meeting minutes. Unemployment was pegged at 8.8 percent to 9 percent for the year, a slight improvement from November's expectations.
The Beige Book said costs were rising for manufacturing and retail businesses and "manufacturers in many districts convey that they were passing through higher input costs to customers or planning to do so in the near future."
Construction materials were rising in Cleveland and Atlanta, but homebuilders noted "little ability to pass through the costs to buyers," the Fed said.
Employment conditions "continued to strengthen modestly, with all districts reporting some degree of improvement."
But employment gains were uneven. "Despite the improvement in most labor markets, some districts, such as New York, St. Louis, Minneapolis and Dallas, also noted layoffs in the region," the Fed said.