In the most recent issue of the Federal Reserve’s Beige Book, most districts indicated increased economic activity in their regions since the previous report. The St. Louis Fed, however, was one of two to indicate a decline in economic activity. (The Cleveland Fed was the other.)
Nationwide, manufacturing improved in most districts, with several banks reporting a less severe impact of winter weather during this reporting period compared to earlier this year. Nearly all reported some level of manufacturing growth, with only one district (Richmond) reporting mixed conditions.
In the St. Louis District, several manufacturing firms reported plans to add workers, expand operations or open new facilities, but these reports were offset by layoffs in the service sector.
Reports on residential housing markets varied across the country, with most areas experiencing low inventory levels and modest rises in home prices. Residential construction reports also varied, with several banks reporting some level of growth, but three banks seeing declines.
Most of the largest metro areas in the St. Louis District saw declines in sales of new and existing homes. Compared with the same period in 2013, January 2014 total home sales were down 12 percent in Louisville, Ky., 5 percent in Memphis, Tenn., and 30 percent in St. Louis. Sales in Little Rock, Ark., were up 7 percent for the period. The St. Louis District was also one of the three areas with a decline in residential construction.
Overall, loan demand strengthened since the previous Beige Book was released. However, most banks noted mixed or declining residential mortgage borrowing. Commercial loan volumes grew in each of the districts reporting on banking with the exception of St. Louis.
Agricultural conditions varied across districts. The Chicago, Kansas City and Dallas Feds reported varying levels of growth or improvement, while agricultural conditions weakened in the Richmond, Atlanta, St. Louis and Minneapolis districts. Higher soybean prices shifted planting intentions away from corn, with the St. Louis Fed reporting that farmers in its District plan to plant 1 million fewer acres of corn and 570,000 more acres of soybeans.