WASHINGTON (AP) - The country spiraled deeper into recession to
start 2009, forcing widespread cutbacks and layoffs among everyone
from blue-collar workers that once churned out construction
equipment to white-collar professionals like business consultants
The Federal Reserve's new snapshot of business activity
nationwide, released Wednesday, showed the economic picture
darkening over the last two months and revealed little hope for a
"National economic conditions deteriorated further," the Fed's
survey concluded. "The deterioration was broadbased, with only a
few sectors such as basic food production and pharmaceuticals
appearing to be exceptions."
Looking ahead, business people rated the prospects "for
near-term improvement in economic conditions as poor, with a
significant pickup not expected before late 2009 or early 2010."
The survey summarizes information from businesses and others
supplied to the Fed's 12 regional banks. The information - most of
it anecdotal - was collected on or before Feb. 23. It's used by the
Fed to get a better idea of what's occurring at the ground level of
the economy and will figure into discussions among Fed Chairman Ben
Bernanke and his colleagues when they meet next on March 17-18.
Most economists expect the Fed will hold its key interest rate
at a record low at that meeting as well as through the rest of this
year to help revive the economy, which has been stuck in a
recession since December 2007. The Fed also has said it will
consider expanding existing relief programs or come up with new
ones to extinguish the worst financial crisis since the 1930s.
The economy also has been battered by a collapse in the housing
market and a lockup in lending that has made it difficult, and more
expensive, for people to secure financing for homes, cars and
The Fed survey said there were "steep declines" in
manufacturing activity in some sectors, and "pronounced declines
Hardest hit were factories that make goods related to the
housing industry. Construction-related equipment and materials,
such as primary metals, wood products and electrical equipment, saw
especially steep drops in production. So did makers of furniture
and cars, the report said.
Factories are getting hit by slower demand at home as well as
overseas, where foreign customers are coping with their own
In the Cleveland region, overall factory production dropped
about 25 percent compared with a year earlier.
Makers of computers, semiconductors and other information
technology products saw further declines in production and orders
in the Dallas and San Francisco regions.
A few bright spots: makers of pharmaceuticals and biotechnology
products saw production gains. The Boston region reported sales
growing at a double-digit pace for biopharmaceutical firms. The
Chicago region reported strong demand for pharmaceuticals and the
Richmond region noted temporary hiring at pharmaceutical companies.
Food processors and makers of certain chemicals also saw pickups
in the San Francisco and Philadelphia regions. And airplane makers
in the St. Louis region are planning to expand existing production,
according to the Fed survey.