FOMC sees economic pickup; AIA, MHC show mixed scene; most states lose jobs

“Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn,” the Committee opined today [Sept. 23]. “Conditions in financial markets have improved further, and activity in the housing sector has increased. ... With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.” Consequently, the FOMC voted unanimously to stick with current monetary policy.

“While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects, and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans,” American Institute of Architects Chief Economist Kermit Baker said in releasing the latest Architecture Billings Index today [Sept. 23]. “Until the anxiety within the financial community eases, these conditions are likely to continue.” The index, which measures the difference in rising less falling billings among responding firms, was at 41.7 in August, down from 43.1 in July; anything below 50 is a net decrease. Among subsectors, however, the 45.6 reading for commercial/industrial practices tied the highest level since January 2008, and the index for residential (mainly multifamily) practices rose for the sixth time in eight months, to 43.4. The readings for institutional and mixed practices were virtually unchanged at 37.5 and 41.4. (Sector indexes are three-month averages.), according to a Sept. 23 Data DIGest report.

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