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Fed survey shows US recession may be over
(Agencies)
Updated: 2009-09-10 04:15 The Boston, Cleveland, Dallas, Kansas City, Richmond and New York regions credited the first-time home buyer tax incentive with spurring sales. Most regions reported downward pressure on home prices, although Dallas and New York said that prices were "firming." The commercial real-estate market, however, continued to drag. Demand for space remained weak and construction fell again in all regions. On the jobs front, employment conditions "remained weak" in all the Fed regions. The nation's unemployment rate climbed to a 26-year high of 9.7 percent in August. It is expected to top 10 percent this year. Many economists predict that rising unemployment will keep consumers cautious. For the budding recovery to be durable, businesses will have to step up spending and investment, analysts say. The Fed's survey found that staffing firms in Atlanta, Dallas, Richmond, Cleveland, Philadelphia, Boston, New York and Chicago did report a "slight pickup" in demand for temporary workers. That's an encouraging sign because employers will usually boost use of temp workers before they hire new employees. Still, several regions noted businesses and local governments were imposing wage freezes or cutting compensation in some cases. With the labor market weak, employers aren't expected to be generous with wages, a force that will keep inflation low, the Fed report said. Expectations for a lethargic recovery also likely will prevent companies from jacking up prices, keeping inflation subdued, the report suggested.
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