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Beige book: Recovery continues, but unevenly

By Neil Irwin

The economic expansion has proceeded unevenly this summer, according to a new Federal Reserve report, with new pockets of weakness emerging in parts of the country.

According to the latest beige book, a compilation of anecdotal reports about business conditions across the country, "economic activity has continued to strengthen, on balance, since the previous survey." However, two of the 12 Fed districts reported that economic activity merely "held steady," and two others indicated that the pace of activity "had slowed recently."

That assessment is a slight downgrade from the previous installment of the beige book, on June 9, which stated that economic activity continued to improve across all 12 Fed districts.

The details of the report, which is prepared in advance of each Fed policy meeting to help officials reach their decisions on monetary policy, paint a picture of an economy that is recovering but hardly showing strength.

Manufacturing activity, for example, "continued to expand" in most Fed districts, although several "reported that activity had slowed or leveled off during the reporting period."

Retail sales "generally indicated a continued rise in spending," although big-ticket items are moving more slowly than basic necessities such as food and clothing. The outlook for consumer spending in the future is also mixed, as the Philadelphia, Cleveland, Kansas City and Dallas Fed districts reported an expectation of sales growth, while others were less optimistic.

The Gulf of Mexico oil spill is having some impact on that region's economy; the Atlanta Fed reported that "leisure travel decreased in the Gulf Coast, but some of that lost tourist traffic was offset by the presence of cleanup crews, oil company workers, and the National Guard."

By Neil Irwin  |  July 28, 2010; 2:12 PM ET
Categories:  Federal Reserve , U.S. Economy  
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Comments

It all comes down to one thing, and one thing only.

The Too Big To Fail banks - in addition to funding the Taliban and al-Qaeda - are not making loans to consumers or small business in America.

It doesn't matter what their excuses are, but small business creates MOST of the jobs in America - and without that engine, recovery can't work.

TRUST BUST the big banks that aren't lending at least 50 percent of their capital to American small businesses. Break them up into their constituent parts.

Posted by: Anonymous | July 28, 2010 2:49 PM | Report abuse

It's the economy/jobs stupid!!!! Nov. 2nd is less than 4 months away!

Posted by: Jimbo77 | July 28, 2010 2:51 PM | Report abuse

The economy is awful.

Bye Bye Dems.

Posted by: drjcarlucci | July 28, 2010 2:54 PM | Report abuse

Why is recovery assumed? Japan went through a stock and real estate bubble in the 1980s and is now twenty years deep with no significant recovery yet made from a deflationary trap. The US just finished with its own real estate bubble and is likely to be caught up in the same trap well before Wall Street or the Federal Reserve can inflate another one.

Posted by: slim2 | July 28, 2010 3:04 PM | Report abuse

There is no economic recovery and there won't be. All recessions are self-induced by the rich in order to save their own behinds and to weaken the middle and working class.

Revolution anyone?

Posted by: Anonymous | July 28, 2010 3:14 PM | Report abuse

Talk about uneven recovery, out of all the cities in the whole US, Washington DC is the only one that is enjoying low unemployment and a healthy economy. Everywhere else is tanking. This is what the Obama administration's record deficit spending is doing, not to mention the national debt that the country has to pay back later.

Posted by: Anonymous | July 28, 2010 3:14 PM | Report abuse

Can someone call joe biden and ask him about recovery summer? Didnt obaba say 250,000 jobs a month?? What a but of clowns. The enconomy blows

Posted by: j751 | July 28, 2010 3:15 PM | Report abuse

Are we better off now than we were two years ago?

Um....NO!!!

Imagine what it will be like two years from now.

YIKES!!!

Posted by: Anonymous | July 28, 2010 3:18 PM | Report abuse

Well, I just bought my family a new 2011 Ford Flex! Beautiful Car ! And to help sweeten the deal, the competion for financing was fierce. With the best offer and lowest rate provided from directly through my auto insurance company, with a finance offer that came in well after the ink on the original agreement was dry. So now I'm using the money I saved on both the purchase of a new car, the financing, and the insurance to pay for a long deserved road trip with the family! My guess here is simple: If I can do this, then you can do this to. You just need to be forced into it is all.

Posted by: Anonymous | July 28, 2010 3:20 PM | Report abuse

A policy of paying people to not work while punishing producers seems to be the Obama recipe for a recovery? Makes sense.

Posted by: akwa01 | July 28, 2010 3:26 PM | Report abuse

I don't think America can take much more of Obama's recovery!

Posted by: Anonymous | July 28, 2010 3:30 PM | Report abuse

I don't think America can stand much more of this "recovery".

Posted by: garys_opinion | July 28, 2010 3:31 PM | Report abuse

Whenever I see Obama or Biden talking about the economy, all I think of is that old Jane's Addiction video for "Been Caught Stealing".

Posted by: Anonymous | July 28, 2010 3:34 PM | Report abuse

It is impossible to decide what is happening to the U.S economy from the data spill out of Washington. Did the first recession end and are we in recovery mode as described by Gaithner? Are we still in the recession mode? Jim Rogers and Shiller say we are headed for double dip? In other words according to Gaithner, Jimmy and Shiller we must be in recovery mode? What about the NBER? They must be in deep coma! To really know what is going on, ask our unemployed and barely employed! They probably say "Depression" What do you think?

Posted by: tjohn1 | July 28, 2010 3:40 PM | Report abuse

EIU predicts several years of growth closer to 2%. They claim that the excessive use of credit fueled the unstable growth of 2002-2007, and that more sustainable growth with reasonable credit will also mean much slower growth.

This is bad news for employment, as employers will only slowly erode the unemployment rate, but it also makes us less susceptible to another major crash from a bubble economy.

Posted by: Anonymous | July 28, 2010 3:51 PM | Report abuse

What planet were you people living on from 2001 through 2009? Do you think this miserable situation started when Obama took office? Tax cuts for millionaires, two wars paid for with Chinese credit (and off the books), drug companies writing Medicare legislation to line their pockets? THAT'S what you want to return to?

Posted by: mhaire | July 28, 2010 3:59 PM | Report abuse

It may not be pretty but the Obama recovery is far, far better than the bush depression.

Posted by: rramos01 | July 28, 2010 4:12 PM | Report abuse

To me the real question is why are these economists who were completely unable to see this economic depression, still in charge of things. Instead of the economists who were warning about it for almost a decade.

Posted by: jjeffery | July 28, 2010 4:24 PM | Report abuse

What has changed? We are importing more oil now. What happened to the trade deficit issues? There is no job creation engine beyond borrowed stimulous funds.

Posted by: marken_ssa | July 28, 2010 4:27 PM | Report abuse

As the article said, the economy continues to grow. Do I see a robust economy, not anytime soon. We should all know this recession was the worst economic downfall since the great depression, at least were moving in the right direction.

Posted by: shipfreakbo214 | July 28, 2010 4:29 PM | Report abuse

But, Why is Obama Destroying America. If you truly want to know what is going on; Then you will have to accept these things as the TRUTH. Once you understand the following things; All things will be understood. So I tell you Obama is the Anti-Christ, Satan on Earth, Lawless One, or what ever else you want to call this Demonic Figure. His words describe him, He is a False Hope, If you listen to him you will love him. He carries a Bow without an Arrow. He will conquer all through his speech, his false hoods will capture all who sit and listen to him.
2 Thessalonians 2:11-12
11And for this reason God will send them strong delusion, that they should believe the lie, 12 that they all may be condemned who did not believe the truth but had pleasure in unrighteousness.

Posted by: makom | July 28, 2010 4:29 PM | Report abuse

The people dug such a deep hole that the Dems don't have enough time to dig them out, and unfortunately will get the blame.

Posted by: Anonymous | July 28, 2010 4:33 PM | Report abuse

Man, the tinfoil hat brigade is out in force today.

Posted by: mhaire | July 28, 2010 4:45 PM | Report abuse

The sooner we realize that we face a long period of anemic growth the earlier we stop looking out for the rain clouds. The feds caused this recession by keeping interest rates at very low levels. They slept while banks spun off CDS and further transferred risks from the lender leading to a frenzy of debt creation. The average middle class American went on a credit binge buying up as much as they could with no cash down. They enjoyed a standard of living very few could have thought possible. Now we are in the de-leveraging phase that will run at least 5 years. Unfortunately, right when the consumer is bankrupt, the government by its ill advised spending binge is also in the same position. So hunker down for a deflationary period. Ben will continue to think he is the superman and has all the "tools' to prevent deflation. Our next crisis will be when no one other than the Feds buy our debt! Only a fool would buy US debt right now. Just as the consumer has stopped paying their mortgage, cities, counties, state governments and the federal government will try to seize debt and/or avoid paying it. Best to invest outside the US where the real growth will happen in the next decade, particularly Latin America and Asia.

Posted by: upnorth85 | July 28, 2010 4:54 PM | Report abuse

This recovery is not about deamons, Democrats, or the devil. It's about Wall Street making up new rules that allowed millions of borrowers to borrow and refinance property that became overvalued due to the inflation created by the lenders. This nonsense has become a standard business practice for the last 40 years as it becomes bigger and more dangerous each business cycle. Furthermore, the billions and billion of dollars borrowed to finance two wars just made everything worse.
If you think things are bad now, if the economy was not rescued by the Obama Administration we could all be now standing in bread lines.
Economics is cyclical and hopefully we will become more productive and competitive as a nation. I wish to remain hopeful, because I believe in the American ability to transend above the difficulties and create new opportunaties.

Posted by: Anonymous | July 28, 2010 5:22 PM | Report abuse

The fed is little more than the tool for the radical corporatist/fascist republican lie machine that will not accept an African American president. The economy would be better if the government seized the banks and the corporations and made them work for the benefit of all the people. The unemployed are lazy, christian reactionaries who will not work at jobs unless it pays them six figures. They need to clean toilets and sweep streets like the rest of us, that would lower the unemployment rate. The unemployed should be drafted by the government to build roads, clean up the gulf and prevent global warming. Only whent he government controls the means of production and can tell people what jobs to hold will this economy get better.

Posted by: Pelosiforpres | July 28, 2010 5:27 PM | Report abuse

I agree that the Obama recovery is MUCH better than the republican depression.

Posted by: Anonymous | July 28, 2010 5:28 PM | Report abuse

It is fair to say that the economy appears not to be in critical condition any more. But it does appear still to be on life support. Any suggestion that it should begin to try to walk on its own a little is met with cries of anguish from the Fed and the Treasury that it is still too weak for the effort. As long as the economy has to be kept on life support, talk of recovery sounds like words out of George Orwell. There probably is at least some reason to hope that the economy will not lapse back into critical condition. But it is also probably a good idea not to count even that eventuality out too heavily.

Posted by: dnjake | July 28, 2010 5:28 PM | Report abuse

S economy will go down and down compared to Europeans, Chinese, etc., as evident by Euro being so MUCH MORE VALUABLE than US Dollar, as evident by so many banks collapsing in US resulting in the massive Government bail outs of the Banks and Autos, etc. etc. UNLESS we address the fundamental problems of the US economy, which problems at their core are due to what Utter Lunatics Republicans in US are and how right-wing (which means Lying for the benefit of the Super rich aka Wall Street gang and War profiteers) 99% of US Media is that it has enabled the Republicans to get away with their Lunacy.

And how Democrats have been not much different than Republicans either, to date as of 2010, once in the office as evident by Obama/Dems that have done really nothing to address these fundamental problems, which fundamental problems with US economy are:

1- Our money (Taxes) wasted on unnecessary Wars.
2- Our money (Taxes) wasted on a Gargantuan Military.
3- Our money (Taxes) not invested in our people and cities as Europeans do with Universal Single Payer Health Care, Universal Education and many other social services. Considering the FACTs that 2Mill+ Americans go bankrupt each year due to health care costs while ZERO Europeans go bankrupt each year due to health care costs, because they have Universal Nationalized Health Care in EVERY European country.

More here:
http://RealNewsPost.com?n=think.32414

Posted by: Anonymous | July 28, 2010 5:56 PM | Report abuse

But, Why is Obama Destroying America. If you truly want to know what is going on; Then you will have to accept these things as the TRUTH. Once you understand the following things; All things will be understood. So I tell you Obama is the Anti-Christ, Satan on Earth, Lawless One, or what ever else you want to call this Demonic Figure. His words describe him, He is a False Hope, If you listen to him you will love him. He carries a Bow without an Arrow. He will conquer all through his speech, his false hoods will capture all who sit and listen to him.
2 Thessalonians 2:11-12
11And for this reason God will send them strong delusion, that they should believe the lie, 12 that they all may be condemned who did not believe the truth but had pleasure in unrighteousness.

Posted by: makom | July 28, 2010 6:08 PM | Report abuse

And the Fed remains fully employed, no lay-offs, promotion of incompetent economists is safe and they keep drawing their big fat guaranteed federal pensions while the rest of us suck on zero interest rates on our retirement savings.

Bankers are still summering in Europe and the Hampton's, getting big bonuses and paying fines instead of jail time.

Way to go Fed. Nothing you have done speaks to instilling confidence in America, unless of course you consider the confidence game that is playing out.

Posted by: Anonymous | July 28, 2010 6:39 PM | Report abuse

I am a 99'er from Rhode island no recovery in this state.No beer to drink no food to eat.This economy has me beat.I try for work everyday.No help wanted is what employers say.Soon i will be in a soup line.Saying hey buddy can you spare a dime.Republicans can stick their attitude where the sun dont shine.That is the party of me and mine.Someday their rich friends could become poor.They would all be crying on the floor.Compassion should always be the the rule.If you have no compassion your a fool.Giving up is not the way.The sun may shine another day.Even the Democrats left the 99'ers in the cold.I am still waiting for this story to be told.President Obama the 99'ers need help.Brian Perry Rumford Rhode Island beaumontstreet@aol.com

Posted by: 20beaumont | July 28, 2010 8:04 PM | Report abuse

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Posted by: brownhall24 | July 29, 2010 12:05 AM | Report abuse

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