Fed: Overall economic activity contracted further or remained weak

The most recent Beige Book was released today and there were echoes of positivity in some of the remarks made although generally, things remain bleak (no surprises there).  Following are some of the highlights of the Book, divided by sectors:


  • Manufacturing activity continued to decline in most Districts and across a wide range of industries. Several reports noted slower pace of decline or stabilized factory activity.
  • Manufacturers’ assessments of future factory activity improved marginally, with contacts in the Boston, New York, Philadelphia, Atlanta, and Kansas City Districts noting a slight upturn in outlook for production and sales.

Nonfinancial Services

  • Demand continued to fall across most industries.
  • Among service firms, there were reports of customers delaying payments or asking for price reductions; receivables were harder to collect.

Consumer Spending

  • Consumer spending remained generally weak. However, several Districts said sales rose slightly or declines moderated compared with previous survey period.
  • Purchases of big ticket and luxury items continued to decline while spending on food and necessities fared better.
  • Used vehicle sales improved slightly in the Boston, Cleveland, Kansas City, and San Francisco Districts, but new car sales remained feeble.
  • Travel and tourism activity contracted further in several reporting Districts, as households and businesses continued to scale back on discretionary and travel spending.In contrast, mountain resorts in the Richmond District said ski season demand was on par with last year, and cruise liners in the Atlanta District reported that deep discounting spurred bookings.

Real Estate and Construction

  • Housing markets remained depressed overall, but there were some signs that conditions may be stabilizing. Many Districts said factors such as homebuyer tax credits, low mortgage rates, and more affordable prices led to a rising number of potential buyers.
  • New home construction activity fell further as inventories remained elevated; some districts reported inventories of unsold homes had turned down slightly.
  • Nonresidential real estate conditions continued to deteriorate over the past six weeks.
  • Commercial real estate investment activity weakened further. Contacts said a decline in credit availability and markdowns on commercial property were keeping buyers and sellers on the sidelines.

Banking and Finance

  • Most Districts reported weaker loan demand overall, but the reports were mixed across loan categories.
  • A number of Districts reported deteriorating loan quality and rising delinquencies for all types of loan categories. In particular, several reports noted more stringent requirements for commercial real estate loans due to worries of worsening loan quality in the sector.

Agriculture and Natural Resources

  • Most regions reported improved planting and growing conditions, except Dallas and San Francisco Districts, which are experiencing ongoing drought.
  • Reduced demand, rising inventories, and lower prices for oil and natural gas led to further declines in energy sector activity.
  • Drilling declined in some districts.


  • Districts that report on prices noted downward pressures.

Labor Markets and Wages

  • Labor market conditions were weak and reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread across Districts.
  • Continuing layoffs, furloughs and hiring freezes kept wage pressures minimal. Contacts from a broad range of industries reported pay freezes, with some noting salary reductions.
  • The Chicago and Dallas Districts saw a slight uptick in hiring of finance personnel due to the sharp increase in mortgage refinance activity. The St. Louis District reported that a food manufacturer and some wood and plastic manufacturers planned on expanding their operations and hiring additional staff.

See the whole Beige Book below:


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