Following is a summary of U.S. economic conditions as reported by the 12 Federal Reserve district banks in the central bank’s latest regional survey, also known as the Beige Book.
The Federal Reserve Bank of Atlanta prepared the latest report. Information was collected before July 9.
Boston: “Economic activity in the First District continues to expand at a moderate pace. Residential real estate sales increased relative to last year and commercial construction activity continues to gain momentum. Sales in the retail sector remain about flat, while the manufacturing and business services sectors continue slow growth. Contacts report that their costs and prices are increasing very moderately, if at all. Firms are generally not laying off workers, but most are also not engaged in substantial hiring. Many contacts cite uncertainty regarding future macroeconomic conditions as impinging on their outlook, and some contacts cite this as a reason for postponing investment or other decisions.”
New York: “Growth in the Second District’s economy has slowed since the last report, though labor market conditions have continued to improve. Price pressures have receded further in both manufacturing and other industry sectors, and retail prices have been stable. Non-manufacturing contacts generally report that conditions have held steady in recent weeks, while manufacturers report flat to weaker activity. Retailers generally report weaker results for May and June, but auto dealers indicate that sales activity was fairly robust; tourism activity has continued to be steady and strong. Home sales markets have shown signs of improvement, while rental markets have remained firm; however, commercial real estate markets have slowed modestly. Finally, bankers report a leveling off in loan demand, no change in credit standards, and further declines in delinquency rates on commercial loans and mortgages.”
Philadelphia: “Overall, business activity in the Third District has continued to improve since the previous Beige Book, although results were mixed. Manufacturing activity slowed somewhat. Retail sales and auto sales continued to increase, but at paces that varied across sectors and states. Third District banks have reported steady growth in lending and stronger credit quality since the last Beige Book. Demand for new home construction held steady, and brokers report improving sales of existing homes. Commercial real estate contacts report little change in current demand, while on average service-sector firms report modest continued growth. Price pressures have eased further in many sectors since the last Beige Book.”
Cleveland: “Economic activity in the Fourth District continued to expand since our last report, but at a slower pace. On balance, manufacturers reported a slight rise in production. New-home construction ticked down, while nonresidential builders saw stronger inquiries. Retailers and auto dealers noted little change in sales during May. Wet shale gas drilling and production increased, though the demand for coal has slowed. Freight transport volume moved lower. And there was some easing in the demand for business credit. Little hiring was reported across industry sectors. Staffing- firm representatives indicated that the largest numbers of job openings were found in healthcare and information technology. Wage pressures are contained.”
Richmond: “Fifth District contacts provided mixed reports on economic activity since our last assessment. Retailers reported strengthening in consumer spending over the last month, and non-retail firms cited increased activity, despite end-of- June power outages caused by severe storms. Bookings remained solid according to tourism contacts, even as vacationers continued to hunt for bargains. Residential real estate was described as slightly improved overall, although many areas continued to experience weakness. Additionally, contacts at District ports noted some improvement in both import and export volumes in recent months. In contrast, manufacturers reported a marked weakening in orders and shipments in June, following strengthening earlier this year. Employment agencies cited a slight slowdown in demand for workers, with the notable exception of high-skill occupations.”
Atlanta: “The outlook among most firms remained cautiously optimistic, although the majority of contacts acknowledged that risks were weighted to the downside. Retailers noted that sales improved slightly, but cautioned that consumers appeared to be conservative in their purchases. Auto dealerships reported continued strong sales. The hospitality sector continued to experience steady growth as occupancy and room rates continued to rise. Most brokers and homebuilders reported modest increases in sales and prices from very low levels of activity. Manufacturing firms indicated that production continued to expand, but at a much more moderate pace than earlier in the year. Bank lending activity increased slightly for residential real estate, while auto loan activity remained robust. Employment growth for the District was subdued and employers remained cautious about future hiring. Lower energy prices have eased pricing pressures for many firms and wage pressures remained modest.”
Chicago: “Economic activity in the Seventh District continued to expand at a moderate pace in June and early July, although once again the pace of growth slowed from the previous reporting period. Growth in consumer spending further moderated, while business spending increased at a steady pace. Manufacturing production increased at a slower pace, and construction activity continued to improve. Credit conditions improved slightly on balance. Commodity prices moved lower, and wage increases remained moderate. The prospects for the District’s corn and soybean crops deteriorated, and crop prices moved higher.”
St. Louis: “The economy of the Eighth District has continued to expand at a modest pace since the previous survey. Residential real estate market conditions have continued to improve moderately. Similarly, commercial real estate market conditions have also improved. Recent reports of planned activity from manufacturing firms have been positive. However, reports from services contacts have been mixed. Overall lending at a sample of small and mid-sized District banks increased slightly from mid-March to mid-June.”
Minneapolis: “The Ninth District economy grew moderately since the last report. Increased activity was noted in consumer spending, tourism, professional services, construction, real estate, and agriculture. Growth was also positive, but slightly slower than in the previous reporting period, in the manufacturing, energy, and mining sectors. Some tightening was noted in labor markets, and wage increases were moderate. Price increases were modest, and some decreases were noted.”
Kansas City: “The Tenth District economy expanded moderately in June. Consumer spending was stronger than expected due to stronger automobile sales and a solid start to summer tourism. Commercial and residential real estate prices rose with stronger sales, and District contacts were optimistic regarding future sales and construction activity. Led by mortgage loan activity, some District banks reported improvements in loan demand and quality. District manufacturing activity edged up and additional gains in production, orders, and capital spending were expected in the coming months. Expanding drought conditions hindered crop development and drove crop prices higher. District oil and natural gas drilling activity held at peak levels but was expected to ease with lower global demand. The price of raw materials for manufacturing rose at a slower pace compared to previous surveys and finished goods prices generally held steady. Wage pressures were subdued except for positions in transportation, high-tech and energy industries.”
Dallas: “The Eleventh District economy grew at a moderate pace over the past six weeks. Overall manufacturing activity continued to expand. Demand for business services remained solid, and transportation services activity increased. Respondents said retail sales grew at a somewhat slower pace than the last report, and automobile sales held steady. The housing sector continued to improve, and commercial real estate leasing activity held steady. Financial firms noted mixed loan demand. Overall energy activity remained strong, although gas- directed drilling continued to decline. Agricultural conditions deteriorated slightly. Employment levels were steady to slightly higher, and prices were mostly unchanged. Wage pressures remained minimal. Outlooks across industries were generally positive, but some respondents expressed concern about European debt issues, U.S. political uncertainty, and healthcare costs.”
San Francisco: “Twelfth District economic activity expanded at a modest pace during the reporting period of June through the beginning of July. Upward price pressures eased somewhat and remained quite contained overall, and upward wage pressures were limited. Sales of retail items rose a bit, and demand grew for most business and consumer services. District manufacturing activity increased slightly on balance. Demand continued to expand for agricultural producers, while activity was largely unchanged for providers of energy resources. Sales and construction activity edged up in District housing markets, and demand strengthened slightly for commercial real estate. Contacts from financial institutions reported a small increase in overall loan demand and slight improvements in credit quality and availability.”
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