Beige Book: Economic Activity Expands, No Distinct Shift in Overall Pace of Growth

The latest issue of the Federal Reserve’s Beige Book reported that economic activity expanded in the 12 Fed districts since the previous Beige Book report. However, no district pointed to a distinct shift in the overall pace of growth. The St. Louis Fed was one of four banks to report modest growth. (The Philadelphia, Atlanta and Kansas City Feds were the other three.)

Real Estate

Barely half of the Fed districts reported stable or growing residential real estate activity related to the construction of new homes and sales of existing homes. Most districts reported some growth in nonresidential real estate activity, with increased construction, leasing or both tied to steady or falling vacancy rates and to rent increases.

In the St. Louis District, home sales decreased on a year-over-year basis, and commercial and industrial real estate market conditions were mixed.

Labor Markets

Labor market conditions, as measured by hiring trends, were reported to be relatively unchanged from generally modest rates in most districts. However, contacts in nearly all districts reported difficulties finding certain types of skilled labor.

St. Louis District businesses indicated that employment and wages grew at a modest pace while prices increased moderately over the past three months, compared with the same three-month period one year ago.

Manufacturing

Reports of manufacturing activity were mixed. Besides the St. Louis District:

• Three districts reported expanded manufacturing activity.
• Four districts saw their growth rates had somewhat moderated.
• One district cited mixed reports from a variety of contacts.
• Three districts reported continued growth.

Reports of planned manufacturing activity in the Eighth District were positive on net. Producers of steel, pet food, plastics, lighting products, consumer goods and industrial appliances plan to hire additional employees and expand operations. Firms that manufacture tools and light machinery plan to lay off workers and close facilities. Reports from auto parts manufacturers were mixed.

Additional Resources

• Beige Book
• On the Economy: How the Fed’s Regional Structure Affects Monetary Policy
• On the Economy: Farmland Values in the Eighth District Decline