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Recent St. Louis Fed Banking and Economic Research

Monday, April 1, 2013

Latest St. Louis Fed Burgundy Books Quarterly Economic Data

The first quarter 2013 edition of the Burgundy Books features more comprehensive data and information on the economic conditions in the Eighth District’s four zones (St. Louis, Little Rock, Louisville and Memphis) with the following new or expanded sections: labor markets, manufacturing, real estate and construction, the household sector, banking and finance, agriculture and natural resources, and the public sector.

Published March 14, the latest Burgundy Books indicate the following related to banking and finance:

St. Louis – Commercial bank performance in both Illinois and Missouri continued to trail both Eighth District and U.S. peer banks during the fourth quarter. In contrast, southern Illinois banks outperformed their Illinois and Missouri counterparts. Agricultural banks in the zone have been helped by large crop insurance payments paid to farmers in the aftermath of last year’s drought.

Little Rock – Arkansas banks generally outperformed their Eighth District and U.S. peers during the fourth quarter of 2012. Still, nonperforming loans of Arkansas banks are relatively high compared with other Eighth District banks and the nation, and some contacts expressed concern about the recent easing in lending standards.

Louisville – Key performance measures suggested that Kentucky and Indiana banks outperformed their Eighth District counterparts and U.S. peers during the fourth quarter of 2012. While significant improvements in asset quality (falling loan delinquency rates) bolstered earnings in the fourth quarter, bankers in the zone still generally reported soft loan demand.

Memphis – Loan delinquency rates for banks in the Memphis zone were similar to other U.S. peer banks, though there was healthy improvement in asset quality reported by Arkansas and Tennessee banks. For the most part, bankers in the zone continued to see soft loan demand.

Read the full reports at

The St. Louis Fed’s Burgundy Books are quarterly summaries of data on economic conditions in the Eighth District. The Burgundy Books serve as a region-specific complement to the Federal Open Market Committee’s (FOMC) Beige Book, which is a collection of anecdotal data the Federal Reserve uses to help it assess current and future economic conditions. It is published eight times a year, before each FOMC meeting.

The remaining Burgundy Books for 2013 will be released on June 13, Sept. 12 and Dec. 12.

Agricultural Finance Monitor Looks at Farmland Sale Trends in 2012

Given the strong growth in farmland values over the past few years, the latest Agricultural Finance Monitor gives an indication of the nature of lending activity in this market, based on survey responses from Eighth District bankers. The issue also looks at farm spending and income, demand for loans, availability of funds and more.

The Agricultural Finance Monitor is the St. Louis Fed’s quarterly survey of agricultural credit conditions in the Eighth District.

Job Polarization Leaves Middle-Skilled Workers Out in the Cold

The economy has increased its demand for high-skilled (high-wage) workers, while opportunities for middle-skilled (middle-wage) jobs have declined. St. Louis Fed economist Maria E. Canon and research analyst Elise Marifian explore how this “job polarization” may require a shift in the sort of training that is encouraged for American workers. Read more in the January 2013 The Regional Economist.

Why Are Corporations Holding So Much Cash?

U.S. corporations are holding record-high amounts of cash. St. Louis Fed economist Juan M. Sánchez and research analyst Emircan Yurdagul explore the reasons why in the January 2013 The Regional Economist. One reason has to do with taxes—both the uncertainty about future taxes and the reality of today’s tax rules. The second reason has to do with the rise of research and development; because of its uncertain nature, this sort of work requires access to high levels of cash.

Residential Real Estate: Rent or Buy?

The residential real estate market showed additional signs of improvement in 2012, though the recovery has been quite different for single-family compared with multifamily markets. As one realtor in the Eighth Federal Reserve District recently said, “Yesterday’s buyer is today’s tenant.” Read more in this Economic Synopses by St. Louis Fed economist Silvio Contessi and research associate Li Li.

Measuring the Contribution of Construction to the Slow Recovery

Construction not only has been important during the recession but also is still potentially dragging down the overall economy. As St. Louis Fed economist Carlos Garriga explores in a recent Economic Synopses, recovery of the construction sector seems a necessary ingredient for a strong and sustained recovery of economic activity and a reduction in the unemployment rate.