WASHINGTON — The economy is showing signs of stabilizing in some regions of the country — especially in parts of the Northeast and Midwest — bolstering hopes of a broader- based recovery this year.
A Federal Reserve snapshot of economic conditions issued Wednesday found that most of the Fed’s 12 regions indicated either that the recession was easing or that economic activity had “begun to stabilize, albeit at a low level.”
The economy remains fragile. But the fact that some Fed regions reported signs of activity beginning to level out raises hope that the recession, which started in December 2007, is drawing to a close.
Four Fed regions — New York; Cleveland; Kansas City, Mo.; and San Francisco — pointed to “signs of stabilization,” the survey said.
Chicago and St. Louis reported that the pace of economic decline appeared to be “moderating.” Boston, Philadelphia, Atlanta, Dallas and Richmond, Va., described activity as “slow,” “subdued” or “weak.” Only Minneapolis indicated that its downward slide in economic activity had worsened.
Combined, the assessments of businesses on the front lines of the economy appeared to be brighter than those they provided for the previous Fed report in mid-June.
The observations in the Fed survey are consistent with an assessment made last week by Fed Chairman Ben Bernanke: that the economy should start growing in the second half of this year, ending the longest recession since World War II.
Many analysts predict the recession eased considerably in the April-to-June quarter. They’re forecasting that the economy shrank at an annual pace of 1.5 percent in the second quarter.
That would mark a big improvement from the annualized 5.5 percent drop in the first three months of this year. The government will release the second-quarter results Friday. Many economists also believe that the U.S. could start growing as soon as the current quarter.
Separately Wednesday, the government said orders to U.S. factories for big-ticket durable goods plunged in June by the largest amount in five months, reflecting the troubles in the auto industry and a steep drop in demand for commercial jets.
Meanwhile, auto sales were mixed across the country, while travel and tourism was down in a majority of the regions.
Most regions reported “sluggish” retail activity, with shoppers continuing to be price- conscious.
