Newspaper article THE JOURNAL RECORD

Fed Report Shows California Emerging from Its Recession

Newspaper article THE JOURNAL RECORD

Fed Report Shows California Emerging from Its Recession

Article excerpt

WASHINGTON (AP) _ California may be emerging from its persistent recession to join the rest of the nation's solid economic growth, the Federal Reserve said Wednesday.

A separate report, meanwhile, showed factory orders nationwide increasing at a healthy clip and provided fresh evidence the economy is flourishing.

"In California, conditions remain weak, although some positive signs are starting to emerge," the Federal Reserve said in a survey of regional economic conditions. "Residential markets are starting to show signs of life" in the nation's most populous state.

The report said that in addition to home building and lending for housing construction, tourism in California is picking up.

The Commerce Department reported that orders to U.S. factories rose 1.1 percent in March, rebounding from a drop in February that was partly weather related.

The indicator of manufacturing growth has risen in seven of the last eight months. Led by new orders for metals and metal products, many components of the index were in positive territory.

"The industrial sector is healthy," said economist Bruce Steinberg of Merrill Lynch Co. But he said the report might cause a downward revision in gross domestic product for the first quarter of 1994 because inventories unexpectedly slipped 0.1 percent in March.

The GDP slowed dramatically in the first three months of the year, expanding at a 2.6 percent annual rate after booming in the final quarter of 1993 at a 7 percent rate.

In another development Wednesday, the United States and its trading partners moved to boost the dollar's value in currency markets around the world. The dollar has been approaching historic lows.

Also, the National Association of Realtors reported the value of American homes increased modestly from January through March as pent-up demand and concern about future mortgage rates pushed consumers into the marketplace. …

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