It was just on Wednesday that a Janet Yellen speech to the Economic Club of Washington signaled that the first fed funds rate hike is now closer than ever. That is of course subjective to many things, and Yellen did remind the public that the Federal Reserve’s Federal Open Market Committee (FOMC) remains very data dependent. Now the Fed has released the last Beige Book for 2015.
The Beige Book is a very dry read for everyone, but it does offer up a general look at the nation’s economy on a semi-live basis. It is the views of businesses and other contacts outside of the Federal Reserve and was based on information collected before November 20, 2015.
Wednesday’s report signaled that economic activity continued at a modest to moderate pace in most of the 12 economic regions. Again, this reading is also before Thanksgiving, and more economic reports have been seen since the November 20 cut-off date.
As far as which districts were doing well and which were doing less so, they were listed as follows:
Economic growth was modest in the Districts of Cleveland, Richmond, Atlanta, Chicago, St. Louis, Dallas and San Francisco. In the Minneapolis District the economy grew moderately, while in the Kansas City District growth was steady on balance with mixed conditions across sectors. In the New York District economic conditions leveled off since the previous report, and in the Philadelphia District aggregate business activity continued to grow at a modest pace. In the Boston District, growth was somewhat slower despite reports of revenue increases.
Labor markets continued to tighten modestly. Atlanta, Kansas City and Dallas reported a slight pickup in hiring, while the remaining districts characterized their increase as modest to moderate.
Prices were generally steady, as input and finished goods prices were stable for manufacturing firms. Some prices were lower due to further declines in commodity and energy prices as well as the strong dollar.
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Consumer spending remained stronger than overall economic trends, the pace of sales ranging from sluggish in New York to moderate in Minneapolis and San Francisco. Housing and autos were both doing more than just offsetting a drag coming from the strong dollar and from low energy prices. It should be kept in mind that the Beige Book is frequently used by the Fed for its decision to raise interest rates.
Tourism was represented as mixed across reporting districts. Richmond, Atlanta, Minneapolis and Dallas showed that tourism grew, while New York activity was at or below year-ago levels.
Additional data points were listed as follows:
- Non-financial services were little changed to stronger, with most of the growth in technology-related services.
- Transportation activity was softer on balance since the previous report.
- Port activity remained strong, although largely on the strength of imports, as exports continued to fall. Cargo volume in Dallas remained soft in recent weeks due to the slowdown in energy-related cargo.
- Conditions in the manufacturing sector were mixed in recent weeks.
- Housing markets improved at a moderate pace since the previous Beige Book, and home prices increased modestly.
- Commercial construction strengthened modestly in most districts.
- Loan demand increased according to a majority of district comments.
- Agricultural conditions varied across districts in recent weeks.
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