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 St. Louis prepared the latest report. Information was collected on or before July 8.
BOSTON: “Economic activity in the First District continues to expand at a moderate pace, according to business contacts. Retailers, tourism contacts, manufacturers and consulting and advertising contacts all report modest increases in sales. Residential real estate contacts report increases in both house prices and sales. Overall prices are rising at a modest pace, generally in line with cost increases. Most businesses are holding employment steady, with substantial staffing changes only at firms experiencing significant increases or decreases in sales. Contacts generally expect the recent trend of moderate growth to continue.”
NEW YORK: “Economic activity in the Second District has continued to expand moderately since the last report. Manufacturers indicate that input price pressures have abated further, whereas service sector contacts report that they remain fairly widespread; prices of finished goods and services are stable to up slightly. Labor market conditions continue to improve gradually, and businesses have become more willing to negotiate on salary. Retailers report that sales were on the soft side in May and especially in June, whereas new automobile sales are reported to be steady. Tourism activity remains steady at a strong level. Commercial and residential real estate markets have continued to firm throughout the region. Finally, bankers report mixed but generally steady loan demand, no change in credit standards, continued narrowing in loan spreads, and further declines in delinquency rates across all loan categories.”
PHILADELPHIA: “Aggregate business activity in the Third District maintained an overall moderate pace of growth during this current Beige Book period. In particular, auto sales accelerated to a strong rate of growth, lending firmed up to a modest rate of growth, and manufacturing activity appears to have grown slightly after declining slightly last period. The growth rate of residential construction, existing home sales, and general services continued at a moderate pace. Manufacturing has resumed at a slight rate of growth after declining slightly last period. An overall outlook for moderate growth has continued since the last Beige Book. Contacts expressed greater confidence in the consumer and in the sustainability of current trends. Firms remain cautious about hiring and about carrying out their long-term capital expenditure plans. However, firms are more comfortable investing when necessary to replace or upgrade aging equipment and to meet growing demand.”
CLEVELAND: “The economy in the Fourth District expanded at a moderate pace during the past six weeks. Manufacturing orders and production were steady or higher. The momentum seen in residential construction since the beginning of the year has slowed, but activity remains above year-ago levels. Nonresidential builders experienced a rise in the number of inquiries and backlogs. Retail sales were lackluster during May, while new motor vehicle sales posted moderate gains on a year-over-year basis. Conventional and unconventional natural gas and oil production was stable, and drilling has declined since the start of the year. Output at coal mines trended lower. Freight transport volume exceeded projections. Demand for credit increased slightly. Hiring picked up in manufacturing and residential construction. Staffing firm representatives reported that the number of job openings and placements was fairly steady, with vacancies found primarily in healthcare and manufacturing.”
RICHMOND: “District economic activity strengthened moderately in recent weeks. Manufacturing shipments and new orders increased. Consumer spending firmed somewhat and auto sales remained solid. Services providers also reported steady to stronger demand. Additionally, tourist bookings were up year over year. In banking, demand rose for new residential mortgage lending. Commercial and industrial lending was flat to slightly higher. Residential real estate sales and construction increased, with speculative building returning to some areas. In labor markets, temp hiring picked up, although many firms were reluctant to hire permanent workers. Average wage growth was flat to faster, and price changes were mixed.”
ATLANTA: “Reports from Sixth District business contacts indicated that economic activity expanded at a modest pace in June and early July. The outlook for the rest of the year remains optimistic for most firms. Retailers noted mixed sales results and vehicle sales grew at a robust pace. Most brokers and homebuilders reported increases in sales and prices, and declining home inventories. Manufacturing firms indicated that activity grew, albeit at a slower rate than in our previous report. Employment growth for the District was modest. Firms remarked that stable input prices have helped improve profit margins slightly.”
CHICAGO: “Economic activity in the Seventh District expanded at a moderate pace in June, and contacts remained cautiously optimistic about growth prospects in the second half of the year. Growth in consumer and business spending picked up. Manufacturing production increased as did construction, led by continued improvement in the residential sector. Credit conditions tightened moderately. Cost pressures were again mild, and wage pressures remained moderate. Crop conditions improved, with the crop ending the period in better shape than a year ago.”
ST. LOUIS: “The economy of the Eighth District has expanded at a moderate pace since our previous report. Recent reports of planned activity in manufacturing and services have been positive. Residential real estate market conditions have continued to improve, and commercial real estate markets have also improved. Total lending at a sample of small and midsized District banks increased from mid-March to mid-June.”
MINNEAPOLIS: “The Ninth District economy showed signs of moderate growth. Increased activity was noted in consumer spending, professional services, manufacturing and energy. Tourism-related activities slowed in May and June in some areas, but tourism businesses were optimistic for the summer season. Commercial construction and real estate grew moderately fast, while residential construction and real estate grew at a robust pace. The mining sector was sluggish, and agriculture decreased. Labor markets continued to tighten slightly, and wage increases were moderate. Price increases were subdued since the last report.”
KANSAS CITY: “The Tenth District economy grew modestly in June, and expectations for future activity improved slightly. Tourism and restaurant sales edged up, while retail and automobile sales were steady since the last survey. District manufacturers reported slowdowns in production and shipments, principally due to regional storms over the survey period. Residential real estate activity continued to be strong, while commercial real estate activity marginally increased. Agricultural growing conditions improved somewhat with recent rains, which led to a drop in expected harvest prices for corn and soybeans. District drilling and mining activity was flat, though energy contacts expected stronger oil and natural gas drilling in coming months. Labor shortages ticked up, but wage pressures remained modest.”
DALLAS: “The Eleventh District economy generally expanded at a slightly stronger pace over the past six weeks than during the previous reporting period. Manufacturing activity increased somewhat overall, with stronger reports from metals and petrochemical producers. However, retail sales were flat after rising in the previous six weeks, and auto sales softened slightly. Nonfinancial services firms noted a continued rise in activity, and demand for accounting services grew at a stronger pace. The housing sector continued to improve, with a rise in new construction. Office and industrial leasing activity remained strong. Financial institutions noted growth in loan demand was stronger than six weeks ago, and energy activity remained at high levels. Drought continued to dampen the agricultural sector. Prices held steady at most Eleventh District reporting firms, and employment levels were flat overall with scattered reports of hiring.”
SAN FRANCISCO: “Economic activity in the Twelfth District expanded at a modest pace during the reporting period of late May through early July. Price inflation was minimal for most final goods and services, and upward wage pressures were mostly muted. Retail sales of goods grew modestly overall, although demand for business and consumer services was mixed. District manufacturing activity improved. Production and sales of agricultural items expanded. Demand for housing strengthened, and commercial real estate activity trended up further. Contacts from financial institutions reported increased overall loan demand.”