Beige Book Shows Black-and-Blue Economy
The Federal Reserve just released the current Beige Book, which is an eight-times-per-year collection of anecdotal evidence on the overall state of the U.S. economy reported by the Fed banks in each of their 12 districts based on interviews with bankers, economists and other business folk.
The book takes its name from its cover.
"Overall economic activity weakened across all Federal Reserve Districts since the last report," the current report begins, gloomily if predictably.
Almost all districts reported an ongoing weak housing market, though sales had reached a stability. Commercial real estate was down in most districts, as well.
Retail (including vehicle) sales were down across the country and lending contracted.
Agricultural districts reported a relatively good harvest but expressed concerns about profitability.
Pricing pressures eased but labor markets weakened.
On to some specific economic sectors as reported from the Fed's districts (Note: The economic conditions are not confined to the city where a particular Fed bank is located. So, for instance, the Kansas City district covers the area from Kansas City to Denver.):
-- Consumer spending and tourism: The San Francisco district reported a rising number of canceled corporate meetings in southern California. Kansas City reported a rise in demand for used cars.
-- Services: Minneapolis and Dallas reported growing demand for bankruptcy services.
-- Manufacturing: All 12 districts reported weakened manufacturing. Boston, Chicago, St. Louis and San Francisco noted stronger demand for aerospace manufacturers. St. Louis, Dallas and San Francisco reported increases in food processing.
-- Real estate and construction: Inventories of unsold homes declined in Chicago and Minneapolis.
-- Banking and finance: Credit standards rose across the country, as did loan delinquencies. Philadelphia reported a rise in bank loan volume in November.
-- Agriculture and natural resources: Mining activity was down and oil and gas production softened thanks to diving prices. Chicago, Dallas, Kansas City and San Francisco reported cattle profits being squeezed.
-- Labor: Generally down across all districts, but Chicago, Boston and Minneapolis reported strong demand for skilled professionals.
-- Prices: The sole good news -- prices dropped across most districts.
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