WASHINGTON (MarketWatch)U.S. economic conditions in January and early February were difficult to discern due to severe cold temperatures and a series of storms that left much of the country trapped under snow and ice, the Federal Reserve reported
In sector after sector and region after region, the weather played havoc on conditions, the report said
There were 119 separate mentions of the word “weather” in the Beige Book
The assessment is not likely to stop the Fed from continuing its steady reduction in monthly asset purchases
The Beige Book does “reinforce our bias, and that at the Fed, that the slowdown in economic activity is short-lived,” said Eric Green, global head of rates, foreign-exchange, and commodity research at TD Securities
The Beige Book said that eight of the 12 Fed districts reported that economic conditions continued to expand though Feb. 24
The New York and Philadelphia regions experienced a slight decline in activity, which was mostly blamed on the weather
Growth also slowed in Chicago, though contacts were still optimistic about the outlook for 2014 Kansas City reported that conditions remained stable
Weather impacted retail sales and manufacturing
Not all of its effects were negative: many districts reported energy production was rising on increased demand
The Fed survey found that employment levels improved “gradually.”
There were no signs of inflation as price pressures were seen as “subdued.”
Reports from home sales were “somewhat mixed.” While many districts said conditions were still improving, they noted that growth had slowed
The Beige Book is a collection of anecdotes on the economy used to help the Federal Reserve prepare for its next interest rate setting meeting
The Fed started to pull back from its monthly asset purchase program in December, and has cut purchases by $10 billion at each of the last two meetings, bringing it down to a $65 billion-per-month pace
Economists expect the Fed to look through the bad weather and to make a similar cut when the Fed policy committee meets again on March 18-19
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