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The economy headed into the spring season with solid momentum, helping to generate more employment opportunities and keep factories humming, the Federal Reserve said Wednesday (March 15).
The Associated Press reported that the Fed’s latest snapshot showed overall economic activity continuing to expand into early March even as the housing market flashed fresh signs of cooling after a red-hot, five-year stretch of record-high sales.
Thus far, the strengthening labor market is translating into modest wage gains for the average worker in most of the Fed regions, the report said. Fed officials closely monitor wages – as well as the prices of goods and services – for insight into the nation’s inflation climate.
In general, consumer prices are rising at a modest pace even though businesses are coping with high energy prices and rising costs for other materials, such as cement, lumber and copper, the Fed said.
The survey is based on information supplied by the 12 regional Federal Reserve banks. The information for the survey was collected before March 6. It will figure into discussions at the Federal Reserve’s next meeting to examine interest rates on March 27-28.
That March meeting will be the first for Federal Reserve Chairman Ben Bernanke, who took the helm on Feb. 1. He succeeded Alan Greenspan, who retired after 18-plus years running the central bank.
Many economists predict the Fed will boost short-term interest rates by one-quarter percentage point to 4.75 at that meeting to keep the economy and inflation on an even keel. The Fed under former chairman Greenspan has been tightening credit for nearly two years.
Although economists have different views on how many more rate increases will be ordered by the Fed in the coming months, most believe that the central bank’s rate-raising campaign probably will come to a close sometime this yea