Econintersect: The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) says economic activity “continued to expand gradually in July and early August across most regions and sectors“. The previous report said economic activity “expanded at a modest to moderate pace“.
This appears to mean that the economy grew at the same weak 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 all districts saw growth in their respective economies except Boston who cited mixed reports from business contacts and some slowdown since the previous report.
The summary for the 18 July 2012 release reads as follows:
….. economic activity continued to expand gradually in July and early August across most regions and sectors. Six Districts indicated the local economy continued to expand at a modest pace and another three cited moderate growth; among the latter, Chicago noted that the pace of growth had slowed from the prior period. The Philadelphia and Richmond Districts reported slow growth in most sectors and declines in manufacturing, while Boston cited mixed reports from business contacts and some slowdown since the previous report.
Most Districts indicated that retail activity, including auto sales, had increased since the last Beige Book report, although Cleveland, Chicago, St. Louis, Dallas, and San Francisco noted the retail improvements were small. Atlanta said that retail growth had slowed, while Philadelphia indicated growth in retail sales was somewhat faster than in the previous report. Boston, New York, Richmond, Atlanta, Minneapolis, and San Francisco recorded strong performance in tourism. Many Districts reported some softening in manufacturing, either a slowdown in the rate of growth or a decline in the level of sales, output, or orders; among those with declining shipments and orders, Philadelphia noted that the rate of decline was tempering.
Districts mentioning nonfinancial services noted increased activity, although at a slowing pace in Boston, softening in New York, and “flattening” in Philadelphia; Kansas City reported that sales of high-tech services declined slightly. Several Districts cited declining demand for staffing services. According to District reports, bankers in New York, Philadelphia, Cleveland, Atlanta, Chicago, and Kansas City saw increases in demand for most loan types in recent months; by contrast, St. Louis, Dallas, and San Francisco indicated that loan demand was mixed, softening, or slightly weaker.
Real estate markets were generally said to be improving. On the residential side, all 12 Districts cited increases in home sales, home prices, or housing construction. Reports on commercial real estate markets were also generally positive, although San Francisco noted stable demand, Boston indicated conditions were not much changed since the last report, and Richmond, Chicago, and St. Louis said commercial real estate conditions were mixed.
District reports indicated that energy and mining activity was generally high and increasing. However, Cleveland noted softening demand for coal, while Minneapolis and Kansas City had some energy sectors up and some down. The Midwest drought has reduced actual and expected farm output, especially cotton, soybean, and/or corn crops in the Chicago, Kansas City, and St. Louis Districts.
Most Districts reported that the selling prices of manufacturing and retail products were largely stable. By exception, several Districts noted concerns about rising agricultural commodity prices, and Richmond mentioned a small uptick in retail prices. Hiring was said to be modest across the Districts, and wage pressures were characterized as contained.
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
