For the reporting period of late February to early April, the twelve Federal Reserve Districts surmise in the latest Beige Book report that the U.S. economy is expanding at a “moderate” pace. The Cleveland, Richmond, St. Louis, Minneapolis, and Kansas City Districts report moderate growth since the last Beige Book report released on March 6. Atlanta, Chicago, Boston, Philadelphia, and San Francisco Districts categorized their regions economic expansion as “modest” in the last six weeks.
The majority of the Districts experienced increases in manufacturing activities. Residential construction and automobile manufacturing showed strength. A number of Districts noted “uncertainty” or “weakness” in defense-related sectors.
Here are other notes from the report:
- Consumer spending grew at a modest rate
- Higher gasoline prices, the payroll tax-hike and winter weather pinned down sales growth
- Several Districts expect sales growth to continue in the “near term”
- Some Districts saw sales numbers for used cars decline
- New vehicle sales remained strong or increased in some Districts
- Modest increase in demand for nonfinancial service
- Several District experience growth in the freight and transportation sectors
- Travel and tourism grew in most reporting Districts due to an increase in business and leisure travel.
Real Estate Assessment
Most Districts report an improved commercial and residential real estate markets. The pace of residential real estate activities increased in Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco. The New York District showed strong activity levels for both buyers and renters.
Homes sales continue to increase–particularly in the Atlanta and Dallas Districts. Low inventories levels and multiple bids on real estate listed for sale have become common in the marketplace. The shortage of housing and the demand has help fueled home price appreciation in several Districts including Atlanta, Kansas City, Dallas, Minneapolis, and San Francisco.
Employment, Wages, and Inflation
Between the reporting periods, the overall jobs report remains stable; some Districts registered a slight improvement. Manufacturing, information technology, residential construction, and professionals services added most to their payrolls.
Wages remained unchanged, but some Districts report that labor shortages in the residential construction, information technology, and engineering fields exert upward pressure on wages.
Other than home price appreciation and the cost of residential construction supplies, inflation remains in check.
Outlooks among respondents remained optimistic across sectors and Districts, with growth mostly expected to continue at the same or a slightly improved pace. Some uncertainty remained, primarily regarding fiscal policy and health care reform.
About Beige Book
The Beige Book provides data on the current state of the U.S. economic. The report compiles interviews with important business leaders, market experts and other sources within each of the 12 Federal Reserve Districts around the country. Respondents provide anecdotal data on business conditions and their assessment of the country’s economic growth.
When expectations of the economy are positive or optimistic, it’s considered bullish news for the U.S. Dollar (USD). A pessimistic analysis has negative or bearish repercussions for the USD.