Basic comments covered that the economy expanded in all regions, but growth has been moderate to modest. Labor conditions continued to improve in all 12 districts, and consumer spending grew in every district. Vehicle sales, consumer sales, and tourism also expanded. Another observation was that real estate demand was mixed amid low inventories and rising prices.
Overall, it is an upbeat report — with a view that inflation is not out of control at all. Most Districts were optimistic about the outlook for growth. The Beige Book said:
Retailers are hopeful that third-quarter revenues will be about 1 to 3 percent higher compared to a year earlier. We heard reports about a run-up in dairy and meat prices that is being partially offset by a decline in the prices of some other agricultural commodities. Food inflation this year is expected to be about 3 percent. Otherwise, vendor and shelf prices held steady. Several of our retail contacts noted that additional monies have been added to their capital budgets, mainly for brick-and-mortar projects. Payrolls are stable.
Wednesday’s release was prepared at the Federal Reserve Bank of Kansas City, based on information collected before July 7, 2014. The report summarizes comments received from businesses and other contacts outside the Federal Reserve, but the Fed always notes that this is not a commentary on the views of Federal Reserve officials.
The Beige Book has historically been called the Tan Book, and we would propose that 90% of the time they should be called the Dull Book.
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