Beige Book: Economy Expanding Moderately
Eight times a year, all of the 12 Reserve Banks gather anecdotal information on current economic conditions in their districts through reports from Bank and branch directors as well as interviews with key business contacts, economists, market experts, and other sources. Then, approximately two weeks prior to each Federal Open Market Committee meeting, results are published in the Beige Book on the Federal Reserve Board of Governors' website. Because the lead paragraph of each region's section often gives a broad view of economic conditions in that region, they get the most attention. The national summary, which compiles the major themes from the 12 reports, provides a very useful overview. Here is a roundup of some of content from the most recent Beige Book, released October 16:
National: Reports from the 12 Federal Reserve Districts suggest that national economic activity continued to expand at a modest to moderate pace during the reporting period of September through early October.
Employment growth remained modest in September. Several districts reported that contacts were cautious to expand payrolls, citing uncertainty surrounding the implementation of the Affordable Care Act and fiscal policy more generally.
Price pressures remained limited in September. Most districts reported only slight increases in commodity prices and limited ability to pass through these increases to their customers.
Contacts across districts generally remained cautiously optimistic in their outlook for future economic activity, although many also noted an increase in uncertainty due largely to the federal government shutdown and debt ceiling debate.
Boston: Reports from business contacts indicate the First District economy continues to grow, at a pace that varies depending on sector. Firms doing business with the government have been affected by the sequester; other firms are also concerned about potential effects of the government shutdown on consumer demand or broader economic effects of hitting the debt ceiling.
New York: Economic growth in the Second District has continued at a moderate pace since the last report. More broadly, some contacts express concern about potential disruptive effects of a prolonged federal government shutdown.
Philadelphia: Aggregate business activity in the Third District slowed to a modest pace of growth during this current Beige Book period. Despite a slower pace of growth in some sectors, contacts overall maintained an outlook for moderate growth.
Cleveland: The Fourth District’s economy continued to expand at a moderate pace during the past six weeks.
Richmond: District economic conditions improved modestly, on balance, since our last report.
Remarks on effects of sequestration were mixed.
Atlanta: Sixth District business contacts described economic activity as expanding slowly in September. The outlook among firms remains optimistic as most expect near-term growth to be sustained at or slightly above current levels.
Chicago: The rate of growth in economic activity in the Seventh District slowed a bit in September. Contacts remained generally optimistic, but several expressed concern about the potential impact of a protracted federal government shutdown.
St. Louis: Economic activity in the Eighth District has grown at a moderate pace since the previous report.
Minneapolis: The Ninth District economy grew moderately since the last report. The effects of the partial federal government shutdown on the Ninth District economy were too early to determine.
Kansas City: The Tenth District economy expanded modestly in September after growing at a slightly faster pace during the previous survey period.
Dallas: The Eleventh District economy expanded at a moderate pace over the past six weeks.
San Francisco: Economic activity in the Twelfth District expanded at a modest pace during the reporting period of late August through early October.
Here are some highlights from the Atlanta Fed's portion of the Beige Book:
- Payrolls across the region expanded, albeit at a slower pace than the previous report.
- Firms noted input costs remained stable.
- Most retailers cited slightly improved levels of spending and auto dealers continued to experience solid results.
- Hospitality reports remained largely positive.
- Residential brokers and builders continued to witness improvements in many parts of the district as sales and prices of new and existing homes increased compared with a year ago.
- Commercial development picked up slightly, led by multifamily construction.
- Manufacturers indicated that new orders and production had increased since the last report.
- Bankers saw increased volumes for both commercial and consumer loans.
- Energy refiners across the region have been in the throes of expansion as new projects and investments continue to be announced.
- The average monthly prices paid to farmers for corn, cotton, soybeans, hogs, and broilers were down but were up for rice, citrus, beef, and milk.
The next Beige Book will be published December 4.
By Mike Chriszt, a vice president in the Atlanta Fed's public affairs department
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