Econintersect: The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) says economic activity “expanded at a modest to moderate pace during the reporting period from the beginning of June to 09 July 2012″. The previous report said economic activity “expanded at a moderate pace during the reporting period from early April to late May”.
This appears to mean that the economy grew at a weaker rate in this current period. Please see the end of this post for words the Federal Reserve uses when the economy is entering a recession.
This report indicated that certain districts saw portions of their economies contracting.
The summary for the 18 July 2012 release reads as follows:
…..overall economic activity continued to expand at a modest to moderate pace in June and early July. The Atlanta, St. Louis, and San Francisco Districts reported modest growth, while Boston, Chicago, Minneapolis, Kansas City, and Dallas described economic activity as advancing moderately. The New York, Philadelphia, and Cleveland Districts noted that activity continued to expand, but at a slower pace since the last report, while Richmond cited mixed activity.
Retail sales increased slightly in all reporting Districts except Boston and Cleveland, where sales were categorized as flat, and New York, where sales softened. Of the Districts that saw an increase in activity, most noted strength in auto sales. In particular, auto dealers noted that demand for fuel-efficient vehicles continued to support sales. Tourism activity remained strong according to contacts in the New York, Richmond, Atlanta, Minneapolis, and San Francisco Districts.
All District housing market reports were largely positive as sales and construction levels increased and home inventories declined. Rental markets continued to strengthen with rising rents being reported in Boston, New York, Atlanta, Chicago, and Dallas. Commercial real estate leasing and construction continued to improve as demand for multifamily units increased in Atlanta, Chicago, and San Francisco. However, both New York and Richmond noted a slowdown in commercial activity, while Philadelphia and Dallas held steady.
Manufacturing activity continued to expand slowly in most Districts, and Cleveland, Atlanta, Chicago, and Kansas City cited slight increases in production levels. However, several Districts reported a deceleration in new orders, and the Philadelphia and Richmond Districts reported declines in shipments and orders. Demand for nonfinancial services remained generally stable in most regions. Richmond noted strong sales among professional, scientific, and technical firms, while Dallas noted strength in energy, legal, and audit-related services. Transportation reports were generally positive, with Kansas City noting an uptick in trucking activity, while Richmond reported increased port activity.
Demand for loans, particularly those related to real estate, grew modestly in most Districts. However, both Cleveland and Richmond noted some weakness in loan activity. Credit standards remained unchanged in New York, Richmond, and Kansas City, while credit quality improved in Philadelphia, Kansas City, Dallas, and San Francisco. Agricultural production and pricing reports were mixed. While drought conditions have affected production in some Districts, others noted favorable conditions. Chicago and Kansas City reported a significant deterioration of corn crops, which has pushed up prices since the end of June.
All Districts conveyed that input prices had stabilized in recent months. Price pressures were described as easing in New York, Philadelphia, Atlanta, and San Francisco as energy costs declined. Wage pressures remained modest, except for highly skilled workers in information technology, health care, transportation, and manufacturing. Employment levels improved at a tepid pace for most Districts. Overall, Districts reported that their contacts remained cautiously optimistic about future business conditions.
Click the “source” hyperlink below the read the full 46 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”
Source: Federal Reserve