WASHINGTON - The U.S. economy ended last year on an encouraging note, with all parts of the country showing improvements, the Federal Reserve reported Wednesday. Factories produced more, shoppers spent more, and companies hired more - pointing to a stronger economy in 2011.
That picture emerged from the Fed's December survey of economic conditions, called the Beige Book for the color of its cover. But risks still loom for the economy. Declining house prices and millions of foreclosures are depressing housing markets around the country, the survey said.
Companies are also paying more for materials including oil, food products, steel, textiles, and chemicals, the survey noted - though competitive pressures prevented them from passing those increased costs on to customers in the form of higher prices last year.
In the Philadelphia area, however, manufacturers and retailers said they expected more increases in 2011 in the prices they charge than they expected last year. They cited price hikes that they have mostly been absorbing for food products, chemicals, petroleum products, metals, electrical equipment, textiles, energy, and shipping charges.
Overall business conditions in the Philadelphia area in December "improved somewhat" since the November report, the Fed said. Manufacturers generally reported gains in new orders and shipments, and retailers said holiday season sales were better than in 2009.
Local banks said loan volume rose slightly in December, mostly for home-equity lines of credit and on credit cards. Other types of lending were flat.
In the area's labor market, staffing firms said there had been some increase in demand for temporary workers. When the economy is recovering from a downturn, as it is now, employers often rely on temporary help until they are certain the rebound will continue. Then they switch to permanent hires.
And even though employers are slowly hiring more, workers lack bargaining power to win bigger paychecks because of high unemployment, which is now at 9.4 percent.
Nationally, the Fed survey said:
Hiring was firming and businesses in most regions planned to increase hiring at the same or faster pace this year.
Retailers across all regions had better-than-expected sales after a strong holiday shopping season.
Factories across the country boosted production, with demand growing for cars and high-tech equipment.
Businesses said they no longer feared a double-dip recession.
The Philadelphia View
Highlights from the Federal Reserve report on the region's economy in December.
Overall business conditions "have improved somewhat" since November, with manufacturers, retailers, auto dealers, and banks reporting slight to moderate gains. Many companies said they were paying more for raw materials and expect to pass along more of that cost this year than they did in 2010.
Manufacturers said new orders and shipments of finished products rose in December, especially for makers of furniture, chemicals, testing/ measuring instruments, and food products. But declines were reported by makers of metals, lumber products, electrical equipment, and machinery.
Retailers reported higher holiday sales than in 2009, especially for outerwear and jewelry. Sales of big-ticket electronic items were not strong.
Loan volume at area banks rose slightly, particularly on home-equity loans and credit cards.
Residential real estate sales experienced a seasonal slowdown, but an increase in rentals was reported. In commercial real estate, more tenants were signing long-term leases.EndText