- The Washington Times - Thursday, April 25, 2002

The economy showed more signs that it was on the road to recovery in March and early April, helped along by solid retail sales, brisk housing activity and some improvements in the nation's battered manufacturing sector, the Federal Reserve said yesterday.
"The overall tone was positive," it said in its latest survey of business conditions throughout the country.
However, "a few districts expressed qualifications about the pace of the recovery or the strength of their regional economies," the Fed added.
The survey, based on information supplied by the Fed's 12 regional bank districts, will be used by the bank's policy-makers when they meet May 7 to discuss interest-rate policy. Most economists predict the Fed will decide to leave interest rates unchanged.
For most districts, retail sales either went up or held steady, the Fed said in the survey. Sales of home furnishings did especially well, but car sales were mixed. Tourism activity improved.
And while home sales and construction activity also increased in most areas, the commercial real-estate market largely remained weak, especially in San Francisco, Dallas and Atlanta.
For manufacturing, conditions were reported as stable or improved in most districts, with some plants hiring back laid-off workers. However, manufacturers' capital-spending plans remained limited.
In other economic reports yesterday, orders to U.S. factories for big-ticket goods fell 0.6 percent in March, after a solid 2.7 percent rise in February, reflecting slackened demand for cars and computers, the Commerce Department said.
Sales of new homes went down 3.1 percent in March, after a strong 6.2 percent rise, the department said in a separate report. Even with the decline, 878,000 homes were sold at an annual rate, a still-robust level.
March's performance on durable goods orders items expected to last at least three years was weaker than many analysts expected. They predicted orders would be flat.
Economists believed the durable goods report yesterday was just a temporary rough patch for manufacturers. They didn't view it as a sign that the manufacturing sector is headed for a serious backslide.
"While there is continued movement forward in manufacturing, clearly the sector has not picked up a whole lot of steam," said economist Joel Naroff of Naroff Economic Advisors.
On the housing front, sales dropped 4.4 percent in the Northeast to a rate of 65,000 in March. They plunged by 19.3 percent in the Midwest to a rate of 134,000. In the South, sales dipped 0.2 percent to a rate of 431,000. But in the West, sales rose 3.3 percent to a rate of 248,000.
According to the manufacturing report, orders for transportation equipment fell 1.6 percent in March, after a strong 11.2 percent gain in February, mostly reflecting weaker demand for ships and boats, the government said.
Orders for cars and trucks declined for the second month in a row, falling 2.6 percent in March. But orders for airplanes and parts posted a 9.5 percent gain after soaring 60.5 percent the month before.
Excluding orders for transportation equipment, durable goods orders edged down by just 0.1 percent.

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