Fed Report Shows Improved Transport Activity

The U.S. economy improved in most of the Federal Reserve’s 12 districts in March, with the transportation sector improving in most areas, the Fed said.

Overall economic activity increased somewhat across all districts except St. Louis, which reported “softened” conditions, the Fed said in its latest “beige book” report released Wednesday.

Freight transport executives in the Cleveland district said shipping volumes continued to show gradual improvement and that they expected that to continue, although “profit margins remain constrained due to overcapacity and rising fuel costs, which have to be absorbed into the current rate structure.”

Kansas City saw a steady rebound in manufacturing and transportation activity, resulting in some new hires. While sales improved, some firms noted concerns about rising fuel costs.

Reports from Dallas-area transportation service firms were generally positive, with strong overseas demand pushing up intermodal cargo volumes. Parcel shippers also saw a pickup in demand.

A handful of firms said they planned on partially reinstating employer matches to employee 401(k) plans or on giving small pay increases, the Fed said.

The Fed releases its beige book report eight times a year. Wednesday’s report, which covered the period of Feb. 23 through April 4, was prepared by the Minneapolis Fed.