A Federal Reserve report on economic conditions across the U.S. showed signs of a rebound from winter weather that slowed first-quarter growth.
The Fed’s Beige Book, a compilation of anecdotal business information from the central bank’s 12 districts, showed the economy grew at a “modest” or “moderate” pace in eight of those regions from mid-February to the end of March. A majority of districts reported higher retail sales, boosted by lower energy costs.
“In our view, the regional commentary from the March Beige Book suggests that the U.S. economy is beginning to recover from a harsh winter, despite the headwinds to growth from a stronger dollar and less energy investment,” Jesse Hurwitz, U.S. economist at Barclays Plc’s investment banking unit in New York, wrote in a note to clients.
Andrew Labelle, an economist at TD Bank Group, wrote “any weather-related weakness will lead to a roughly equal positive bounce in the second quarter.”
Unusually harsh winter weather depressed the economy in the first quarter, lopping 0.5 percentage point from growth, according to the median estimate in a Bloomberg survey of 37 economists conducted March 30 to April 1. Payrolls grew by 126,000 in March, the smallest gain since December 2013, as the jobless rate held at 5.5 percent.
The Beige Book included optimistic notes for the second quarter from trucking firms in the Richmond Fed district, the hotel and conference sector in the Atlanta district and from an oil field machinery manufacturer in the Dallas district.
“I’m expecting a rebound in GDP growth in the second quarter,” James Bullard, president of the St. Louis Fed, told reporters following a speech at the National Press Club in Washington. “I’m expecting reasonably good jobs reports in the second quarter.”
The Beige Book released Wednesday in Washington was compiled by the Cleveland Fed based on information collected on or before April 3.