Fed Beige Book Signals Slow Improvement to Steady Growth

As a reminder, this is a summary of comments received from businesses and other contacts outside the Federal Reserve, so it is NOT a commentary on the views of Federal Reserve officials.

The Beige Book indicated that economic activity has expanded since the previous Beige Book report. At the same time, no Fed Districts pointed to a distinct shift in the overall pace of growth.

Steady as she goes…

Those with moderate growth were The New York, Cleveland, Chicago, Minneapolis, Dallas, and San Francisco. Those with modest growth were Philadelphia, Atlanta, St. Louis, and Kansas City. Boston appeared to be improving, and Richmond reported further strengthening.

Some basic detail in the Beige Book were as follows:

• General consumer spending grew in most Districts at rates ranging from slight to moderate, with few changes in the pace of growth compared with the last Beige Book.
• Trends in employment, wages, and prices were relatively unchanged in the Federal Reserve Districts, with greater wage pressures reported in sectors where shortages of skilled labor persisted.
• Most Districts reported a continued expansion of auto sales, noting record-high levels for several markets within the Philadelphia and Dallas Districts.
• In some parts of the New York and Philadelphia Districts sales began to fall back from their relatively high levels.
• Tourism activity was reported to have increased across much of the nation, with many Districts reporting higher hotel booking and occupancy rates.
• Non-financial service sectors improved overall.
• District reports on manufacturing were mixed or divided almost evenly into one of three characterizations of the sector’s activity: expanding, contracting, or unchanged.
• The manufacturing outlook remained generally upbeat, with New York, Philadelphia, Richmond, and Atlanta reporting increased optimism.
• Residential real estate activity generally expanded or held steady in about half of the Districts.
• About half of the Districts also reported some growth in construction and in sales or leasing of nonresidential properties.
• Loan demand rose in eight Districts and held steady in one, with credit standards were largely unchanged. Six Districts reported improving credit quality, falling delinquency rates, or both.
• Reports regarding farm products were mixed.
• Oil and gas production and demand for related activities continued to edge up from already high levels (and total coal production mostly held steady).