- The Washington Times - Thursday, March 7, 2002

The economy showed more signs of improving in January and early February, a Federal Reserve survey says, offering evidence the nation is recovering from the recession.
The Fed's latest survey of business activity around the country, released yesterday, suggested that signs of a rebound were becoming more widespread and were evident in most areas.
In its previous survey, the central bank struck a more cautious note, saying there were "scattered reports of improvement."
The new survey will be used when Federal Reserve policy-makers meet March 19 to discuss interest-rate policy. Economists say they believe the Fed, which sliced interest rates 11 times last year, will hold rates steady as it did at its January meeting.
"The Fed's survey tells me that the recession is very much behind us, but we are going to have a modest recovery," said economist Clifford Waldman of Waldman Associates.
In other encouraging economic news yesterday, the Commerce Department reported that orders to U.S. factories rose 1.6 percent in January, lifted by stronger demand for cars, computers and machinery. It was an additional sign that the battered manufacturing sector is turning a corner.
A series of recent economic reports has indicated the recession, which began in March 2001, probably had ended and will be recorded as one of the mildest in U.S. history.
The picture of the economy painted by yesterday's reports are consistent with an economic assessment Federal Reserve Chairman Alan Greenspan gave Congress last week. His message: The country, bruised by the recession and the terrorist attacks, is on the road to recovery, but Americans should not expect a red-hot rebound.
Because consumers kept buying throughout the slump, they will have less pent-up demand. That means spending probably will not rise as quickly as in past rebounds, Mr. Greenspan and other economists said.
The Fed survey said retailers in Boston, New York, Philadelphia, Atlanta, Dallas, Richmond, San Francisco and Kansas City, Mo., reported "modest improvements" in sales, but sales were mixed for other areas. Some regions said that home furnishings and appliances were selling briskly, while other areas noted that car sales remained solid.
Many business contacts in the beleaguered manufacturing sector told the Fed that they expected to increase production by the second half of this year. Factories in Cleveland and Chicago raised automotive production in response to higher demand.
Some manufacturers noted a slight improvement in demand for high-tech products. Others said they were not cutting as many factory workers as they did last year.
Manufacturers, hardest hit by the ailing national economy, have been showing more indications of emerging from a 1-year slump.
In the government's manufacturing report, orders for transportation equipment posted the biggest gain, rising 4.1 percent in January. Orders for cars went up a solid 0.8 percent.
Excluding orders for transportation equipment, factory orders rose 1.2 percent in January, the fourth increase in the past six months.
In the high-tech sector, orders for computers went up 4.8 percent, and orders for semiconductors rose 14.2 percent.
These advances are a good sign for the sector, which took a big hit when companies scaled back capital spending in response to the slump.

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