Beige Book: U.S. Economy Continues to Grow

During weeks when the Federal Reserve’s Beige Book is released, the On the Economy blog features a Wednesday post based on the book in lieu of the regularly scheduled Thursday post.

The U.S. economy continued to expand across most regions, with the majority of districts reporting modest or moderate growth, according to the latest issue of the Beige Book. Outlooks were mainly positive, with six of the 12 Federal Reserve districts foreseeing moderate growth.

Information received from business contacts indicates that economic conditions in the Eighth District¹ have improved modestly since the last report.

Real Estate

Residential real estate activity generally improved. Most districts reported a slight to modest increase in existing- and new-home sales. Home prices went up in many districts, and residential construction rose in seven districts. Both rose in the Eighth District.

Seven districts (including the Eighth District) reported higher commercial construction activity.

In the Eighth District, residential real estate activity was flat. From September to October, seasonally adjusted home sales slipped marginally in Louisville, Ky., Memphis, Tenn., and St. Louis, but ticked up in Little Rock, Ark. More than half of local real estate contacts anticipate demand for single-family houses to rise slightly in the first quarter of next year.

Labor Markets

Employment continued to grow, and wage growth was generally described as modest. Seven districts (including the Eighth District) reported tightening labor markets.

The Eighth District noted moderate growth in employment and wages. More than half of firms surveyed in mid-November expect to expand employment over the next 12 months.

Consumer Spending

A majority of districts cited higher retail sales, especially for apparel and furniture. Motor vehicle sales decreased slightly in most reporting districts, and a few districts (including the Eighth District) observed a shift in demand toward used vehicles.

In the Eighth District, consumer spending activity appeared to be mixed, according to information from general retailers, auto dealers and the hospitality industry. Multiple auto dealers reported a sales slowdown, while most dealers anticipated higher sales and inventory in the next quarter.

Notes and References

¹ The Eighth District is headquartered in St. Louis and includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Additional Resources

• St. Louis Beige Book
• On the Economy: Real GDP Growth Projected at 3.7% Annual Rate in Q4
• On the Economy: Do Rises in Oil Prices Mean Rises in Food Prices?