Fed's Beige Book: Pace of Decline Slowing in More Parts of U.S.
The Federal Reserve's Beige Book -- the eight-times-per-year collection of anecdotal evidence on the economy from each of the Fed's 12 districts -- was released moments ago and, although the book says things are still bad, the pace of decline is slowing across wider parts of the U.S.
We'll just quote from the book's opening paragraph:
"Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level. Five Districts used the words 'slow', 'subdued', or 'weak' to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization. Minneapolis said the District economy had contracted since the last report."
Click here to read the entire report.
Or just read our summary below. (When we mention a Fed district by name, such as the Richmond district, it's important to know we're not talking about just Richmond proper. The Richmond district includes a broad geographic area including Virginia, Maryland, North Carolina, South Carolina, the District and most of West Virginia.)
-- Even though residential real estate remained soft in many districts, it showed signs of improvement in some. However, commercial real estate -- which many think is the next big credit bomb to go off -- is looking worse and worse in all districts.
-- Consumer spending and tourism were soft across all districts, and the San Francisco district reported a sharp fall-off from this time last year.
-- Health-care services were one of the bright spots in the book, with reports of hiring across most districts.
-- On autos: "Chicago indicated that the quick resolutions of the Chrysler and GM bankruptcies have boosted business confidence, and that automakers were scheduling a pickup in production for July. However, ongoing shutdowns of domestic auto plants have led to precariously low business volumes for parts suppliers, according to Chicago and St. Louis."
-- On wages: "The weakness of labor markets has virtually eliminated upward wage pressure, and wages and compensation are steady or falling in most Districts; however, Boston cited some manufacturing and business services firms raising pay selectively, and Minneapolis said wage increases were moderate."
Posted by: Dermitt | July 30, 2009 4:02 PM | Report abuse
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