Fed: Economy ends ’10 on high note

Associated Press

WASHINGTON

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 that emerged from the Federal Reserve’s survey of economic conditions released Wednesday.

Still, risks loom. Declining home prices and millions of foreclosures are depressing housing markets around the country, the survey said.

Companies also are paying more for materials including oil, food products, steel, textiles 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 even 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.

Price increases remain tame. 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.