WASHINGTON - Price pressures have stabilized as the economy continues to experience "slow to moderate growth" in most parts of the country, the Federal Reserve reported yesterday.

The latest "beige book" assesses business conditions in the Fed's 12 district bank regions through August and serves as a guide for the Sept. 21 meeting of the Federal Open Market Committee. Most analysts expect Fed officials to keep short-term rates steady.

The report suggests Fed officials are confident that the inflationary pressures that rattled the bond market earlier this year have largely disappeared. Except for lumber, it says, "prices are generally stable and there is little evidence of inflationary cost pressures."

Federal Reserve Board governor Edward Kelley, in an interview yesterday, said he is hopeful that price jitters will not return any time soon. "The situation has apparently stabilized after we had that flurry in the spring, and I'm certainly glad to see it, and I hope and believe that it will continue," he said.

Kelley said he is increasingly convinced that the pickup in inflation earlier this year resulted from the surge in economic activity in the third and fourth quarters of 1992. Revised figures issued last week from the Commerce Department showed that GDP shot up at an annual rate of 3.4% in the third quarter and 5.7% in the last three months of the year.

"The lesson in that is that if the economy does accelerate rapidly and strongly, there is a latent inflationary potential there that we have to be worried about," said Kelley.

Kelley said he expects "some acceleration" in growth during the second half of the year, but he agreed with many analysts who stress that the near-term outlook is for generally slow growth without major price pressures.

According to the Fed's beige book, "economic growth appears weaker on the East and West coasts while central areas such as Cleveland, Dallas, Kansas City, and Minneapolis report stronger than average growth."

The most downbeat assessment was still out of California, which the report says continues to experience weakness "in a broad range of sectors - including aerospace and defense-related manufacturing, trade, construction, finance, and government."

Many of those surveyed in California said they expect the federal budget agreement to bring more defense cuts and higher tax rates that affect small business owners, farmers, and wealthy individuals. Businesses and consumers were also said to be cautious because of the tax law changes and worries about health-care reform.

New England "appears to be expanding only marginally," the Fed report says. Retailers in the region reported sales in late August that ranged from flat to down as much as 5% compared with a year earlier.

Atlanta said economic activity in the Southeast slowed in July and August compared with the first half of the year. And Richmond said businesses struggled as the hot weather dampened retail traffic, pushed up manufacturers' costs, and devastated crops.

But Cleveland reported "brisk retail sales and steady gains in production," with strong demand for furniture and appliances and "exceptional new car sales" over the last two months. Manufacturers generally reported strong orders, and retail sales were up smartly at larger department stores and elsewhere.

Dallas said businesses reported a pickup in sales and employment, with strong orders in several manufacturing industries. Home building remained strong, and banks said load demand had picked up.

Chicago reported sluggish business conditions, and Philadelphia called overall activity "steady."

Corporate reorganizations continued to hurt job growth in many regions, the Fed report says. It notes that New York was shaken by layoffs announced by IBM Corp. and that other districts were pessimistic about jobs in manufacturing. But Dallas, Cleveland, and Minneapolis also showed signs "that labor markets may be reviving," the report says.

Retail sales are described as weak in most regions, with "unseasonably slow" sales in Atlanta and Boston. The main exception was automobile sales, which were said to be strong in nearly all regions. Cleveland said dealers of light trucks and new cars saw their best summer sales in over five years, and St. Louis car dealers said sales were up 10%.

Home construction continued to strengthen in many regions, reflecting the drop in interest rates.

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