Beige Book Summary

1
Beige Book Summary

• Janan Hatem

2
What It Is

• The Federal Reserve Beige book provides overall
  summaries of the economic sectors across the
  nation and also breaks down the information by
  region
• The opinions are not views of the Fed but rather
  of businesses and contacts outside the Fed

3
Breakdown by District

• Boston
• Economic activity continues to expand
• Retail sales are on the rise
• Hiring and capital spending remains cautious and
  energy costs are a cause for concern
• Demand for insurance
• Housing markets remain strong
• New York
• Economic growth is slowing down
• Decreases in retail sales
• Sluggish manufacturing
• Tourism has softened
• Improved labor market
• Robust housing sector
• Philadelphia
• Economic Activity increased
• Manufacturing and retail sales increased
• Steady hiring
• Slow down in auto sales
• Overall economic outlook is positive

4

• Richmond
• Economy expanded from September lulls,
  particularly in service and manufacturing sectors
• Slowing home sales
• Strong demand for housing
• Agriculture is ahead of schedule
• Atlanta
• Moderate economic growth due to hurricanes
• Positive outlook for 4thQ retail sales
• Slowing residential and commercial building
• Tourism was interrupted
• Strong demand for laborers and specialized
  construction workers
• Elevated prices for building materials and energy
• Farm output adversely affected by storms
• Chicago
• Moderately paced expansion
• Soft consumer spending and increased business
  spending
• Robust construction and real estate activity
• Household loan demands decreased while business
  demands increased
• High input costs and upward wage trends

5

• Minneapolis
• Economic Growth
• Growth in commercial real estate, manufacturing,
  energy, agriculture, consumer spending and
  tourism.
• Modest district job growth and wage increases
• Price increases for manufacturing materials,
  retail food, heating fuel and petroleum
• Kansas City
• Economic expansion
• Steady retail gains, increased manufacturing
  activity, improved labor markets
• Strong energy activity
• Solid housing and agricultural sectors
• Weak commercial real estate
• Modest Wage pressures
• Dallas
• Slight increase in economic activity
• Strengthened manufacturing and business service
  activity
• Increased lending but weak deposit growth
• Healthy energy industry but weaker than might be
  expected
• Hesitation in hiring due to high energy prices
  and uncertainty about global terrorism
• Overall favorable outlook and believe expansion
  will improve slowly but continually.

6

• Overview

7
Consumer, Business and Residential Spending

• Consumer
• Mixed by District and category
• Warm weather attributed to weak retail sales in
  some areas
• Hurricanes affected tourism in some areas
• Business
• Capital spending picked up modestly.
• Increase in business loans
• Hiring activity increased modestly
• Reports of permanent hiring became more frequent
• There were isolated shortages of workers in some
  areas
• Residential
• Robust real estate activity
• Increasing home prices at a healthy pace

8
Manufacturing

• Activity expanded further
• Producers of durable goods exhibited more
  strength than producers of non-durable goods
• Demand for metals productions, petroleum-based
  products and heavy equipment in various areas
• Strong demand for consumer electronics helped
  boost demand for semiconductors
• Surge in light vehicle sales helped reduce
  inventories to a more desirable level

9
Banking and Finance

• Loan demands for households diminished while loan
  demand for businesses increased.
• Decline in residential mortgage applications
• Refinancing activity fell off

10
Prices and Employment Costs

• Stable wage pressures and wages continued to
  trend higher
• Concern about high benefits costs, most notably
  health insurance
• Concern over high input costs
• Energy and petroleum based products, metals, and
  construction materials.
• Trucking passed off cost increases to customers
  in some areas, while more difficult in others
• Manufacturing customers were accepting price
  increases
• Construction rising prices for building
  materials in short supply
• Many builders absorbed costs but in many areas
  were able to pass some of it off to homebuyers

11
Agriculture and Natural Resources

• Fall harvests ahead of normal pace
• Low current prices for corn and soybeans
• Producers plan to store crops in hopes of future
  higher prices
• Activity in energy industry continued to increase
  despite some disruptions due to hurricanes

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Overall

• The economy is set for overall modest growth with
  high energy costs still weighing heavily on the
  producers and consumers