Summary of Economic Reports by Federal Reserve District Banks

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 Richmond prepared the latest report. Information was collected on or before April 7.

BOSTON: “The First District economy continues to expand moderately, according to business contacts, although growth rates vary across sectors and firms. Most -- but not all -- retailers and manufacturers are seeing sales and revenue increases from a year ago; several continue to cite adverse effects of the recent winter weather. Advertising and consulting firms report strong growth, with the exception of a government contractor. Real estate markets continue to strengthen, although lack of inventory is constraining home sales in Massachusetts and commercial contacts cite concerns about ‘highly optimistic’ assumptions underlying purchase prices and lending decisions. Very few firms outside of advertising and consulting are adding to head counts. Price changes remain minimal. The outlook is somewhat mixed, but mostly positive.”

NEW YORK: “Economic activity in the Second District rebounded since the last report, as the harsh winter weather abated. Prices of finished goods and services remained generally stable, though businesses in a broad range of sectors report upward pressure on input prices. Manufacturers and especially service-sector firms in the District report that activity has picked up in recent weeks. Labor market conditions have shown signs of firming, in both the manufacturing and service sectors. Both general merchandise retailers and auto dealers report that sales have rebounded in recent weeks, following a weather-related slump in the first few weeks of the year. Tourism activity has been mixed since the last report, with weather continuing to be a factor. Both housing markets and commercial real estate markets were mixed but somewhat improved, on balance, in recent weeks. Finally, banks report increased loan demand from the commercial sector, little change in credit standards, and across the board declines in delinquency rates.”

PHILADELPHIA: “ Aggregate business activity in the Third District grew at a moderate pace during this current Beige Book period. Many sectors rebounded to various degrees from the economic disruptions caused by severe winter weather in January and February. Auto sales rebounded robustly over the Beige Book period, returning sales to levels above one year ago. General retail sales contacts reported moderate growth that helped bring sales levels even with the prior year’s levels. Manufacturers also reported slight growth similar to what they had reported before the severe winter weather. An extended ski season helped winter tourist destinations to do well, while reports from the shore destinations were mixed during their off-season. Lending volumes grew slightly over this period, and credit quality continued to improve.

“Since most sectors seem to be resuming their trends from before the recent winter disruptions, most contacts are as optimistic as before, if not more so. Overall, contacts anticipated moderate growth over the next six months and continued to express confidence in the underlying economy. In regard to hiring and capital expenditure plans, firms are beginning to increase capital expenditures to boost efficiency, but they continue to approach new hiring with caution.”

CLEVELAND: “On balance, economic activity in the Fourth District declined slightly in the past six weeks. The severe winter weather appears to have negatively impacted business activity to a heightened degree; some producers and service providers are still experiencing lingering effects. Demand for manufactured products grew at a slow rate. Building contractors reported that their pipelines remained active, while field work slowed. Retailers and auto dealers experienced disappointing sales during February and into March. In the energy sector, shale gas production stayed at a high level, while coal output trended lower. Freight volume declined. Demand for business and consumer credit moved higher. Hiring was sluggish across industry sectors. Reports by staffing-firm representatives on the number of job openings and placements were mixed, with job vacancies found primarily in manufacturing and health care. Wage pressures are contained. Input and finished goods prices saw little change, apart from increases in metals, building materials, and diesel fuel.”

RICHMOND: “The Fifth District economy expanded moderately since our last report. Manufacturing reports were mixed, ranging from lackluster to a pickup in production. Retail revenues also varied in recent weeks, with moderate growth on balance. Revenues remained generally flat in the non-retail service sector. Tourism increased, although persistent cold weather continued to lower forward bookings. Residential real estate markets improved; inventory was low in many areas although there were pockets of new construction. Construction of multifamily housing remained solid and construction of retail space increased. However, office and industrial building softened. Residential mortgage lending was sluggish and refinancing declined further. Commercial borrowing strengthened. Leasing of retail and industrial space picked up, while demand for office space weakened. In agriculture, prolonged winter weather delayed planting of row crops; prices of beef and pork rose. Natural gas production remained robust. Reports on labor markets were mixed, and average wages rose modestly. According to our latest survey, service sector prices edged up more quickly while retail prices advanced at a slower pace. In manufacturing, prices of raw materials and finished goods rose at a slower pace.”

ATLANTA: “On balance, the Sixth District economy expanded at a modest pace from mid-February through March. Reports across sectors were optimistic and most business contacts expect near-term activity to grow at a moderate pace. Retailers cited a slight pickup in activity after experiencing sluggish sales at the beginning of the year. Hospitality contacts in areas negatively impacted by the adverse winter weather saw improvements in activity. Home sales were mixed but prices continued to appreciate from a year ago, according to residential homebuilders and brokers. Commercial real estate activity improved with construction growing at a modest pace from last year. Manufacturers reported continued improvements in new orders and production. Bankers noted an increase in loan demand. Hiring remained restrained for all sectors except construction. Prices increased slightly but most firms continued to report having little pricing power.”

CHICAGO: “Growth in economic activity in the Seventh District picked up in March, and contacts generally maintained their optimistic outlook for 2014. Growth in consumer and business spending increased. Growth in manufacturing production was moderate, while growth in construction and real estate activity was modest. Credit conditions were little changed on balance. Cost pressures remained mild. Corn, soybean, milk, hog, and cattle prices moved higher.”

ST. LOUIS: “Business activity in the Eighth District has declined slightly since our previous report. While recent reports of planned activity in manufacturing have been positive, reports in services have continued to be negative on net. Residential real estate market conditions have deteriorated slightly, while commercial real estate market conditions have been mixed. Finally, total lending at a sample of small and mid-sized District banks decreased slightly from mid-December to mid-March.”

MINNEAPOLIS: “The Ninth District economy continued to grow at a moderate pace since the last report. Increased activity was noted in commercial construction and real estate, professional services, manufacturing, tourism and energy. Mining and consumer spending were level, while agriculture was mixed and residential real estate and construction activity decreased. Labor markets continued to show signs of tightening, and wage increases were moderate. Overall price increases were modest.”

KANSAS CITY: “The Tenth District economy grew moderately in March, and most contacts were optimistic about future activity. Consumer spending increased despite flat auto sales, with solid sales expectations heading forward. District manufacturing activity grew further, and professional, high-tech, and health service firms reported improved sales. Commercial and residential real estate activity strengthened, and energy activity expanded. Bankers noted slightly higher loan demand, better loan quality, and rising deposits. In agriculture, District crop conditions remained dry, and livestock prices increased due to low inventories and strong export demand. Transportation firms reported some moderation in sales growth. Prices increased in most industries, with slightly more firms reporting higher wage pressures and labor shortages for skilled positions than in previous surveys.”

DALLAS: “The Eleventh District economy grew at a moderate pace over the last six weeks. Most manufacturers noted an increase in demand, although there were also reports of flat or slightly decreased activity. Retail and automobile sales increased and were above year-ago levels. Demand reports from nonfinancial services firms were mixed, but contacts were universally positive in their outlooks. Housing demand remained robust and home prices rose further. Loan demand grew at a slower pace than in the previous report. In the energy sector, oilfield services activity was robust and drilling increased, while drought conditions continued to negatively impact the agriculture sector. Price increases were noted in certain industries, but most contacts said prices were stable. Employment was flat to up slightly, with some reports of higher wages. Overall, industry outlooks were slightly more positive than six weeks ago.”

SAN FRANCISCO: “Economic activity in the Twelfth District continued to improve moderately during the reporting period of mid-February through early April. Upward pressures on prices and wages were quite modest overall. Demand for consumer goods improved slightly relative to the prior reporting period, while demand for business and consumer services was mixed. The manufacturing industry appeared to gain some momentum. Demand for agricultural and resource-related products was largely stable, but weather-related factors held back production in some areas. Activity in residential and commercial real estate markets advanced further. Banking contacts reported that loan demand increased overall, notably from small business borrowers.”

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