ECONOMY ON STEADY COURSE : FEDERAL RESERVE'S FINDINGS ON STRONG WAGES, LOW INFLATION PROPEL STOCKS.

Byline: Robert D. Hershey Jr. The New York Times

Despite fresh strength in the economy, wages and prices remain largely in check, a survey by the Federal Reserve found Wednesday.

The lack of quickened inflation was taken by private analysts as a crucial factor weighing against action by the central bank to tighten monetary conditions at its policy meeting early next month. Stock prices promptly climbed after the survey was issued at noon, while bond prices rose in early trading but finished slightly lower.

``Nearly all districts report expanding activity, and several indicate the pace of growth accelerated recently,'' said the Federal Reserve Bank of Kansas City, which compiled this round of the periodic anecdotal reports from the 12 districts. But despite tight labor markets for both skilled and entry-level workers, it said, signs of higher wages ``remained scattered.''

The poll, which is part of the Fed's preparation for meetings of the Open Market Committee, covered the six-week period through June 11, one marked by statistics that mostly portrayed a resurging economy after a near stall in the early part of the year.

``This confirmed that there was an improvement in the economy since the last FOMC meeting,'' said Stuart G. Hoffman, chief economist at the PNC Bank in Pittsburgh. He said the strength came particularly in housing, retailing and even manufacturing. ``But it is without any signs yet of worsening consumer inflation or pressures on wages,'' he added.

Nonetheless, there were the usual geographic variations and contrary trends within districts. For example, while the New York and Boston districts were among the nine showing improved factory activity, these two were said to be the only districts with lagging retail sales.

A second survey published Wednesday found 64 forecasters predicting that gross domestic product would grow at a 4 percent annual rate in the April-June quarter, up from the 2.3 percent rate in the first three months of the year. This survey, issued by the Federal Reserve Bank of Philadelphia, predicted that the growth rate would moderate to 2.4 percent in the second half of the year.

According to the Federal Reserve's survey, called the beige book for the color of its cover, the economy ``continued to advance at a moderate pace'' during May and early June, with retail business and services generally stronger, factories busier and home and commercial construction also brisker in most districts.

On the other hand, mortgage lending declined, wet weather hampered home building in the Chicago district and elsewhere, and drought seriously hurt agriculture in several districts. Wheat farmers in Kansas and Oklahoma may harvest less than half their normal crop, the Fed was told.

Tourism was especially buoyant, with hotel occupancy in New York City remaining at a 16-year high, strong attendance gains at Florida theme parks, rising gambling revenues in Mississippi and swelling, double-digit airport traffic in Atlanta, site of next month's Olympic Games.

One of the tightest labor markets is the Boston district, the Fed indicated, with businesses finding it necessary to recruit professional workers from other regions and factories being forced to raise wages.