The economy slipped amid the Philadelphia region's icy weather for most of January and February, the Federal Reserve said Wednesday as part of its national snapshot of business activity, which otherwise showed improvement for much of the country.
In this region, many retailers realized losses through heavy discounting of winter inventory. On the bright side, Philadelphia auto dealers anticipate a release of pent-up demand when spring arrives, the Fed said.
The bank's latest so-called Beige Book report follows a generally more positive report for December. Declining activity for Philadelphia happened recently across the board in retail and auto sales, construction, manufacturing, tourism, and other categories, the bank said.
"Despite the temporary declines in many sectors, most contacts remained optimistic, although they now expect only modest growth over the next six months," the survey said of the region, which comprises Eastern Pennsylvania, South Jersey, and Delaware.
Conditions improved in most U.S. regions, the Fed said, helped by slight gains in areas such as employment and commercial real estate.
Eight of the Fed's 12 regions reported improved activity. The improvement was depicted as "modest to moderate."
New York joined Philadelphia in reporting declines. Growth slowed in Chicago, and Kansas City reported no substantial changes.
The Beige Book is based on anecdotal reports from businesses and will be considered with other data when the Fed meets March 18 and 19.