Beige Book: Economic Activity Continued To Expand

According to the latest issue of the Federal Reserve’s Beige Book, reports from the 12 districts suggest that overall national economic activity continued to expand in October and November. Also, several contacts remained optimistic about the outlook for future economic activity. In the St. Louis District,¹ economic growth slowed slightly from the pace reported in the previous Beige Book.

Real Estate

Construction and real estate activity expanded overall in October and November, but saw a fair amount of variation across sectors and regions. Reports on overall residential real estate activity were mixed, and about half of Fed districts reported an increase in home sales. However, home sales decreased in the St. Louis District on a year-over-year basis.

Labor Markets

Overall price and wage inflation remained subdued in October and November, and a number of districts reported slight to moderate increases in labor costs during the reporting period. Upward wage pressures continued to be evident for certain types of occupations and for skilled workers.

In the St. Louis District, businesses indicated that, in the past three months, employment levels have grown slightly, while wages have grown modestly, compared with the same period last year. Regarding employment, 64 percent of contacts reported levels staying about the same, while 32 percent reported a slight increase and 5 percent reported a slight decline. Regarding wages, 57 percent of contacts indicated that they remained about the same, and 42 percent indicated that they were higher.

Consumer Spending

Consumer spending continued to trend higher in most districts in October and November. Some contacts viewed lower gasoline prices as a contributing factor to higher consumer spending, and an early cold spell helped spur sales of winter apparel in several districts.

Anecdotal reports from St. Louis District retailers indicated slow to modestly increasing consumer spending on net. Half of the retailers surveyed anticipate fourth-quarter sales to be similar to a year ago. The remainder of contacts was evenly split between anticipating lower and higher sales.

Notes and References

¹ The St. Louis Fed District includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Additional Resources

• Beige Book
• On the Economy: Are Wages and the Unemployment Rate Correlated?
• On the Economy: Farmland Values Up, Farm Income Down in Eighth District