The U.S. economy ended last year on an encouraging note, with all parts of the country showing improvements. Factories produced more, shoppers spent more and companies hired more - pointing to a stronger economy in 2011.
That's the picture from the Federal Reserve's Beige Book survey of economic conditions released Wednesday. New York was among four Fed regions showing "improving" conditions, according to the survey.
Still, risks loom. Declining home prices and millions of foreclosures are depressing housing markets around the country, the survey said. And companies are paying more for materials including oil, food products, steel and chemicals, the survey noted. However, competitive pressures prevented them from passing those increased costs on to customers in the form of higher prices.
And though employers are slowly hiring more, workers lack bargaining power to win bigger paychecks because of high unemployment, which is now at 9.4 percent.
The Fed will monitor inflation as it reviews its $600-billion Treasury bond-buying program, which is intended to boost the economy by lowering interest rates, encouraging spending and lifting stock prices.
Fed Chairman Ben Bernanke says he is optimistic the economy will strengthen this year. But he warned last week it will take up to five years for unemployment to drop to a normal level of around 6 percent.
Meanwhile, the government ran a budget deficit of $80 billion last month, down from a year ago, the Treasury reported. - AP