April 2012 Beige Book: Economy Expanded at a Modest to Moderate Pace

Econintersect: The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) says economic activity “continued to expand at a modest to moderate pace from mid-February through late March”. This is almost the exact words used in the previous report.

These are good anti-recession words – please see the end of this post for words the Federal Reserve uses when the economy is entering a recession.

All Federal Reserve districts used positive words to describe their respective economies.

The summary for the 11 April 2012 release reads as follows:

Reports from the twelve Federal Reserve Districts indicated that the economy continued to expand at a modest to moderate pace from mid-February through late March.  Activity in the Boston, Atlanta, Chicago, Dallas, and San Francisco Districts grew at a moderate pace, while Cleveland and St. Louis cited modest growth.  New York reported that economic growth picked up somewhat.  Philadelphia and Richmond cited improving business conditions.  The economy in Minneapolis grew at a solid pace and Kansas City’s economy expanded at a faster pace.

Manufacturing continued to expand in most Districts, with gains noted in automotive and high-technology industries.  Manufacturers in many Districts expressed optimism about near-term growth prospects, but they are somewhat concerned about rising petroleum prices.  Demand for professional business services showed modest to strong growth and freight volume was mainly higher.  Reports on retail spending were positive, with the unusually warm weather being credited for boosting sales in several Districts.  While the near-term outlook for household spending was encouraging, contacts in several Districts expressed concerns that rising gas prices could limit discretionary spending in the months to come.  New-vehicle sales were reported as strong or strengthening across much of the United States.  Tourism increased in most reporting Districts.  Residential real estate showed some improvement, with many contacts citing expansion in the construction of multi-family housing.  Activity in nonresidential real estate increased or held steady in most Districts.  Agricultural conditions were generally favorable. Mining activity expanded and oil extraction rose, while natural gas drilling slowed.   Banking conditions were largely stable, with some improvement seen in loan demand.  Several Districts reported increased credit quality.   

Hiring was steady or showed a modest increase across many Districts.  Difficulty finding qualified workers, especially for high-skilled positions, was frequently reported.  Upward pressure on wages was constrained.  Overall price inflation was modest.  However, contacts in many Districts commented on rising transportation costs due to higher fuel prices.

Click the “source” hyperlink below the read the full 61 page 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”

Steven Hansen

Source: Federal Reserve