The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) “indicated that economic activity has expanded in nine [of 12] of the Districts since the previous Beige Book report“. The previous report said “indicate that economic activity increased at a modest pace in most regions of the country since the previous Beige Book report”. My interpretation is that the Fed is saying the rate of economic expansion has slowed in parts of the country.
Please see the end of this post for words the Federal Reserve uses when the economy is entering a recession.
This report is based on information collected on or before 04 January 2016. The summary for this 13 January 2016 release reads as follows:
Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded in nine of the Districts since the previous Beige Book report and contacts in Boston were described as upbeat. Meanwhile, New York and Kansas City described economic activity in their Districts as essentially flat. Atlanta and San Francisco characterized the growth in their Districts as moderate; Philadelphia, Cleveland, Richmond, Chicago, St. Louis, Minneapolis, and Dallas described their Districts’ growth as modest. Contacts’ outlooks for future growth remained mostly positive in Boston, Philadelphia, Atlanta, Chicago, Kansas City, and Dallas.
Growth of consumer spending ranged from slight to moderate in most Districts, while auto sales were somewhat mixed, as activity has begun to drop off from previously high levels in some Districts. Reports of tourism activity were also mixed.
Among the Districts that reported, nonfinancial services generally grew at a modest or moderate pace, although reports from staffing services and transportation services were somewhat mixed.
With the exception of motor vehicles and aerospace, most manufacturing sectors displayed a weakening in activity. Also, fewer Districts reported increases in manufacturing activity than decreases during the latest reporting period. Several Districts reported the strong dollar’s negative impact on demand, while some noted that low energy prices have had a smaller, mixed effect.
Residential and commercial real estate activity generally improved, according to District reports. Stronger activity tended to be cited for multifamily construction and commercial real estate. House prices and commercial rental rates also rose somewhat in most Districts.
Overall, most Districts reported that loan demand grew, credit quality improved, or loan delinquencies fell, with credit standards changing little.
Districts reported that agricultural sectors weakened overall, and farm incomes were stressed. Flooding and drought in various regions aggravated the effects of already low and falling prices for farm commodities, caused in part by weak global demand and the strong dollar. Unseasonably warm winter weather in much of the nation further depressed energy prices and slowed significant segments of that sector.
Labor markets continued to improve, with employment increases evident in reports from seven Districts. Four Districts mentioned signs of labor market tightening. However, Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.
Click the “source” hyperlink below to read the full report.
The Beige Book is a summary of current economic conditions:
Commonly known as the Beige Book, this report is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis.
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
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