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Road to recovery

  • Sluggish progress in bank earnings
    U.S. bank earnings rose in the first three months of the year to the highest level in nearly five years, and the number of troubled banks fell for the fourth straight quarter.
  • Home sales rise broadly, raising hopes of rebound
    Americans are buying more homes in every region of the country, the latest indication that the housing market could be on the mend.
  • Investors favor Bernanke: Poll
    Global investors give Federal Reserve Chairman Ben Bernanke his highest approval rating since 2009 and expect him to take further action this year to accelerate a revival in the U.S. economy and financial markets.
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Associated Press
The nation’s economy enters the new year on a note of optimism as the Federal Reserve reported 2011’s final weeks were its strongest.

Economy finishes 2011 on high note, Fed says

– The final weeks of 2011 were the economy’s best since it seemed to be slipping toward recession in late spring – a shot of optimism for 2012.

Consumers spent more freely. Factories made more goods. Americans stepped up travel. And the auto industry enjoyed its best stretch of the year.

That’s the bright picture the Federal Reserve sketched in a survey released Wednesday. It said all but one of its 12 banking districts experienced growth from late November through the end of the year.

The one exception was Richmond. Even in that district, the Fed said economic activity either “flattened or improved slightly.”

The Fed said that some sectors of the economy, notably housing, remain weak. But overall, the message was encouraging. It comes just six months after the economy nearly stalled under the weight of high food and gasoline prices and supply disruptions from Japan that slowed U.S. manufacturing.

The economy and the job market have both improved since then. And December may end up being the strongest month of 2011. Employers added 200,000 jobs. And the unemployment rate fell to 8.5 percent – the lowest rate in nearly three years.

“The Fed’s report Wednesday confirms what everyone else has been seeing in the economic data from retail sales to auto sales and manufacturing – activity is improving,” said Jennifer Lee, senior economist at BMO Capital Markets.

Most of the Fed’s districts reported holiday sales increased over last year. In particular, the New York and Dallas districts reported healthy gains. Boston, New York and Minneapolis reported exceptional growth in online sales.

Consumers are spending more on cars and travel, the survey noted.

U.S. manufacturing continued to lift the economy, particularly in industries that make heavy equipment and steel. That has helped boost energy, farming and auto manufacturing sectors, the report said.