Beige Book Sees Continuing Economic Improvement

Overall economic activity continued to increase at a modest to moderate pace in January and early February, the ""Federal Reserve"":http://www.federalreserve.gov/ said Wednesday in the Beige Book.

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The report ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô an anecdotal review of conditions in each of the 12 Federal Reserve districts ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô showed economic improvement varying across the country.

Economic activity rose at a ""somewhat faster pace"" in the Philadelphia and Atlanta districts but growth was slower in New York. Activity expanded at a moderate pace in the Cleveland, Chicago, Kansas City, Dallas, and San Francisco districts.

St. Louis noted a modest pace of growth, while Minneapolis characterized the pace of growth as firm, the Beige Book said. The Boston and Richmond Districts reported economic activity expanded or improved in most sectors.

Residential real estate activity increased ""modestly"" in most parts of the country. Philadelphia reported ""strong"" residential sales activity.

The Boston, Cleveland, Richmond, Atlanta, Kansas City, and Dallas districts also reported growth in home sales, but without the adjective. New York noted ""steady to slightly softer"" home sales and home sales declined in St. Louis while San Francisco noted ""home demand persisted at low levels.""

The Beige Book reported ""contacts' outlooks on home sales

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growth were mostly optimistic"" with contacts in Boston, Philadelphia, Atlanta, and Dallas expecting home sales to rise further.

Home prices declined or held steady in many areas. Cleveland and Atlanta reported little movement in house prices, while contacts in Boston, New York, Philadelphia, Richmond, Chicago, and Kansas City reported some declines.

Single-family residential construction was weak in Chicago and declined in St. Louis; Cleveland reported a year-end uptick seen in construction had slowed though Minneapolis noted increased single-family building permits. Boston, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco reported increased multifamily construction activity.

Reports on banking conditions were generally positive across the country. Lending increased in the New York, Philadelphia, Richmond, Chicago, Dallas, and San Francisco Districts but was little changed in St. Louis and Kansas City. Loan demand was described as weak in Richmond and soft at regional banks in Atlanta.

Demand for residential mortgage loans increased in New York and Richmond. Mortgage demand was flat to moderately stronger in St. Louis but ""softened"" in Kansas City.

Overall, lending standards remained restrictive in San Francisco and Richmond and were largely unchanged in St. Louis and Kansas City. Lending standards tightened further for commercial borrowers in New York.

Credit conditions in Chicago improved slightly, while quality improved in Philadelphia and Kansas City. Delinquencies were steady or declined in Cleveland. Mortgage delinquencies proved steady in the New York District but delinquencies decreased in other loan categories.

The Federal Open Market Committee (FOMC) is scheduled to meet March 13 to review monetary policy. Though followed closely by economists and the media, the Beige Book ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô issued two weeks in advance of a meeting of the FOMC ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô is rarely cited in the minutes of the Committee meetings.