The economy continued to improve modestly to moderately through early February, although weather dampened activity, according to the Beige Book, released by the Federal Reserve on Wednesday.
Eight districts said activity was better, mostly characterized "as modest to moderate," while New York and Philadelphia saw "slight" drops in activity, which likely resulted from "the unusually severe weather experienced in those regions."
Chicago also saw a decline in growth, while Kansas City said conditions were stable.
"The outlook among most Districts remained optimistic," the report said.
A severe winter across most the nation cut into retail sales in most districts, but Richmond, St. Louis, and Minneapolis "reported modest sales growth."
Sales of autos also decreased, with weather being blamed, although Cleveland bucked the trend, reporting "strong gains."
Tourism grew "in a number of districts," but Philadelphia said tourism was down, and New York and Minneapolis termed it "mixed."
"Hotel occupancy rates in Manhattan and New Jersey increased, buoyed by the Super Bowl, while hotel business was down in western New York State due to the harsh winter storms," according to the Beige Book.
Demand for nonfinancial services "was mixed compared with the last report ... Boston and San Francisco reported strong demand for technology related services." Again, weather tamped manufacturing sales and production in several districts, but "modest improvements were noted in Boston, Atlanta, Minneapolis, and Dallas."
The residential real estate market also showed modest improvement, with Boston and New York gave "mixed" and Philadelphia, Cleveland, Minneapolis, and Kansas City down.
"Employment levels improved gradually for most Districts, and shortages of specialized skilled labor continued to be reported," the report said. "Price pressures remained subdued, with the exception of upward cost pressures for some energy and construction products. Wage pressures remained stable for most Districts."
