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Data Readings Converge to Show an Economy Regaining Momentum

A construction worker in downtown Miami last month. New data points to the economy getting back on a path of moderate growth.Credit...Lynne Sladky/Associated Press

For months, the weather has dominated discourse about the economy. Analysts attributed the dearth of shoppers, the weak employment numbers and the overall decline in economic activity to the cold and snow in the eastern half of the nation, the freakish storms in the South and Midwest, and the drought in the West.

But finally a set of numbers is emerging that takes the temperature of the economy without the taint of severe weather. And while some of the data is disappointing — for starters, exports slowed in April and productivity gains have been modest — over all the economy appears to be getting back on a moderate growth path after the setbacks of the first quarter.

“You’re getting an underlying look at what the economy looks like,” said John Canally, an economist for LPL Financial. “And it looks good, though it’s not all the way back to where it’s been.”

On Wednesday, the Commerce Department said total April exports of $193.3 billion and imports of $240.6 billion resulted in a goods and services deficit of $47.2 billion, hitting a two-year high and up from a revised $44.2 billion in March.

The exports declined from March by 0.2 percent, as the imports rose 1.2 percent, driven by an increase in consumer goods, capital goods, automotive vehicles, parts and engines, as well as food and beverages and other items.

The numbers, along with other statistics released in recent days, indicate an upswing in business activity and expectations for greater spending in the months ahead, economists said. That is a silver lining to the clouds over the economy generated by the nation’s overall inability to produce enough domestically to match the demand for consumer goods from abroad.

“Rising imports are not a sign of economic weakness,” said Joshua Shapiro, chief United States economist for MFR Inc. “To the contrary, it’s a sign of economic demand.”

Economists are already looking ahead to the Labor Department’s jobs report for May, which will be released Friday morning. But already there are signs that things are moving in a better direction. Some of the data released on Wednesday fell short of expectations but was viewed as consistent with solid growth in the second quarter after the pace of economic activity fell at an annual rate of 1 percent in the first quarter.

New numbers show that productivity, which measures the output of the economy per hours worked, has slowed since 2012. Nonfarm business sector productivity fell at a 3.2 percent yearly rate in the first quarter. Output fell 1.1 percent even though hours worked grew 2.2 percent.

In another report released on Wednesday, the Institute for Supply Management index of nonmanufacturing activity rose to 56.3 in May from 55.2 in April, the highest reading since August.

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The container ship MSC Michaela in New York Harbor. A wider trade gap is seen as good news.Credit...Mark Lennihan/Associated Press

The release of the Federal Reserve’s so-called Beige Book reinforced the picture of an economy generally expanding nearly everywhere in the country. The report, compiled by the Fed’s 12 regional districts and issued about two weeks ahead of each of the central bank’s regular monetary policy meetings, characterized growth as moderate in its Boston, New York, Richmond, Chicago, Minneapolis, Dallas and San Francisco districts, and said growth elsewhere was modest. The Kansas City area was the only district that slowed slightly compared with the previous report.

Based on informal surveys of local businesses, the Fed’s regional banks found that consumer spending was continuing to expand, though it was held back to varying degrees by a late Easter and late spring. Non-auto retail sales grew at a healthy clip. The Fed report said lingering wintry weather weighed on sales in parts of Boston and New York.

The spring season is generally when the real estate market kicks into high gear, but the Fed report found that residential housing activity was mixed as low inventories slowed sales in areas like New York and Kansas City.

Most economists do not put much credence in the Beige Book because it is largely anecdotal. But it still offers a window into the health of various regions.

For instance, in New York, Broadway shows were bringing in significantly more people and money than last year, reflecting an increase in the number of shows as well as in tourism. But the city’s information technology sector appears to be suffering from a shortage of workers available for hire.

On the West Coast, a fatal hog virus is plaguing the district, driving up pork prices, and the region’s farmers are struggling from too little rain. But Midwestern districts are being drenched by too much rain. In West Virginia, a closed coal mine has reopened because of strong demand from European and Chinese customers.

“The Beige Book isn’t so much a road map as a history lesson,” said Lawrence R. Creatura, a portfolio manager at Federated Investors. “It’s always fascinating reading. The job of investors is to figure out what happens next.”

Other economists have devised their own methods for interpreting the fine print of the 50-page report. Mr. Canally, of LPL Financial, counted the 34 mentions of weather in Wednesday’s report, noting that most were in a positive light about improved conditions. March’s Beige Book, by contrast, mentioned the weather’s negative impacts in almost all of the 119 times it was cited, he said.

Separately, the monthly survey of hiring by ADP Employer Services, a unit of the payroll processor Automatic Data Processing, showed fewer hires than economists had expected, but the numbers were still rising. Private sector payrolls increased by 179,000 nonfarm jobs from April to May, according to the ADP report, which revised its April employment increase down to 215,000, from 220,000.

Small businesses added an estimated 82,000 jobs, ADP said. Manufacturing added 10,000 jobs and construction added 14,000 jobs.

While the report, which usually comes out only a couple of days ahead of the government’s jobs report, is closely watched for clues to the official data, the connection between the two is fairly unreliable, economists point out. Last month, ADP’s report indicated far lower numbers than the big jump that ultimately came out in the government’s jobs report. Economists are predicting a robust increase in payrolls, perhaps of 200,000 or more, when the jobs numbers are released on Friday.

But many were also expecting the unemployment rate, which fell to 6.3 percent in April, to rise for May if the improving economy has encouraged more people who had dropped out of the work force, where they are no longer counted as unemployed, to start looking for work again.

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: Data Readings Converge to Show an Economy Regaining Momentum. Order Reprints | Today’s Paper | Subscribe

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