Federal Bank survey shows weak economy in 10th District

KANSAS CITY, Mo. -- The economy in the region covered by the Federal Reserve Bank of Kansas City remained relatively weak in December and early this month, according to a report released Wednesday.

A bright spot for the fed's 10th District was that holiday retail sales held up better than many in the industry expected, with most stores reporting slight increases from a year ago.

The district encompasses Kansas, eastern Missouri, Nebraska, Colorado, Oklahoma, northern New Mexico and Wyoming.

Large discount stores continued to enjoy stronger sales than luxury retailers, and home furnishing items sold well. Some retailers said heavy discounting fueled the holiday period sales and they don't expect that pace to continue.

Manufacturing activity in the region declined further in December. Many manufacturers continue to lay off workers and their capital spending was well below year-ago levels.

However, the fed reported that a higher percentage of plant managers than in previous surveys expect future increases in production. While most manufacturers continue to trim their inventories many expect them to stabilize in the months ahead.