Econintersect: The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) characterizes "the pace of growth as either modest or moderate". The previous report said economic activity "expanded at a measured pace in recent weeks".
It appears there is no knock-on effect from Hurricane Sandy in this report. Please see the end of this post for words the Federal Reserve uses when the economy is entering a recession.
Overall, the report indicates the economy is growing slower than hoped - but weak areas in the economy are healing. No indications of any sector degrading, or signs of any significant improvement in the rate of growth.
The summary for the 16 January 2012 release reads as follows:
Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report, with all twelve Districts characterizing the pace of growth as either modest or moderate. Since the previous Beige Book, activity in the New York and Philadelphia Districts rebounded from the immediate impacts of Hurricane Sandy. Growth in the Boston, Richmond, and Atlanta Districts appears to have increased slightly, while the St. Louis District reports some slowing.
All twelve districts reported some growth in consumer spending. Overall, holiday sales were reported as being modestly higher than in 2011, though sales were below expectations for contacts in many of the Districts. Auto sales were reported as steady or stronger in ten Districts. Citing concerns that consumers will spend cautiously due to ongoing fiscal uncertainty, retail contacts and auto dealers reported a slightly dimmer, though positive, outlook for future sales. Tourism activity was reported to have increased across much of the nation due to strong business and international travel, early snowfall in some ski areas, and a rebound in areas disrupted by Hurricane Sandy.
Activity among nonfinancial service sectors improved overall. Firms within the six Districts reporting on transportation services generally noted increased volumes. Manufacturing was mixed overall since the previous Beige Book; six Districts reported an expansion of activity and three reported a decrease. Among Districts reporting on their firms' near-term expectations, the manufacturing outlook remained generally optimistic; however, capital spending plans were less uniformly positive.
Since the previous Beige Book, real estate activity has expanded or held steady in eleven Districts for existing home sales and leasing; eight Districts for residential construction; eleven Districts for nonresidential sales and leasing; and nine Districts for nonresidential construction. Overall loan demand was steady in five Districts, rose in four, and fell in one. Credit standards were largely unchanged, except in two Districts where there were some signs of loosening. Six Districts reported improving credit quality and/or falling delinquency rates.
Although rain partially eased drought conditions for some agricultural regions in three Districts, reports of agricultural activity remained mixed. Districts reported that energy and mining sector activity was steady at high levels for most energy-related products but significantly weaker in coal production and coal-related investments.
Trends in wages, prices, and employment conditions were relatively unchanged in the Federal Reserve Districts. Input price pressures were reported to be steady overall with mixed reports for specific commodity prices in various Districts. Employment conditions were also little changed since the last report. However, hiring plans were more cautious for firms doing business in Europe or in the defense sector. Wage pressures were stable in all twelve Districts, though several Districts cited greater pressures for firms that reported difficulties finding qualified workers with specific skills.
Click the "source" hyperlink below to read the full report.
Fed's Words When Economy is entering a Recession
For the December 2007 recession, here is the lead up summary words from the Beige Books:
- 28Nov2007 - "expanding"
- 16Jan2008 - "increasing moderately"
- 05Mar2008 - "growth slowed"
- 16Apr2008 - "weakened"
For the March 2001 recession which ended in November 2001, here are the Beige Book summary words:
- 17Jan2001 - "economic growth slowed"
- 07Mar2001 - "sluggish to modest economic growth"
- 02May2001 - "slow pace of economic activity"
- 13Jun2001 - "little changed or decelerating"
- 08Aug2001 - "slow growth or lateral movement"
- 19Sep2001 - "sluggish"
- 24Oct2001 - "weak economic activity"
- 28Nov2001 - "remained soft"
- 16Jan2002 - "remained weak"
Source: Federal Reserve