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Harsh weather hurts state’s service sector and retail: Federal Reserve

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The harsh winter of 2013/2014 has made itself felt across the state’s economy according to the The Federal Reserve’s ‘Beige Book’, a summary of commentary from the Fed’s districts published Wednesday. New York state is classified as District Two under the Fed’s reporting system.

New York and Philadelphia experienced a slight decline in activity, which was mostly attributed to the unusually severe weather experienced in those regions. Growth slowed in Chicago, and Kansas City reported that conditions remained stable during the reporting period. The outlook among most Districts remained optimistic.

The Fed notes that the only good news for tourism in the state was the Super Bowl in early February but that hotels in Niagara Falls, Buffalo and Rochester all suffered depressed business conditions. Downstate Manhattan hotels had a pretty flat month, but Broadway shows provided some relief for beleaguered visitors who boosted sales there by 7%.

At the hard end of the state’s economy, the Fed found a decrease in demand commercial mortgages and commercial/industrial loans. There was some bright news with an uptick in manufacturing early on in 2014.

And while upstate auto sales were sluggish in January, keeping potential buyers off the lots, a couple of Auto Shows in Buffalo and Rochester seemed to turn things around in February. A Siena College poll pegged consumer confidence during this period at a six-month high, the Reserve said.

Potential house buyers are still struggling with tough  loan conditions from most lenders.

The District’s housing markets have been mixed since the last report. Contacts in western New York State note some softening in both activity and prices in early 2014 - largely a function of the unusually cold and snowy weather, but also reflecting increased difficulty obtaining credit. More broadly, though, home sales across New York State showed resilience in January…

Federal Reserve Beige Book March 2014

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