Fed Beige Book Economic Roundup Finds Moderate Expansion But Soft Manufacturing in July/Aug

(Federal Reserve)  Reports from the12 Federal Reserve districts suggest economic activity continued to expand gradually in July and early August across most regions and sectors. Six Districts indicated the local economy continued to expand at a modest pace, and another three cited moderate growth. Among the latter, Chicago noted that the pace of growth had slowed from the prior period. The Philadelphia and Richmond districts reported slow growth in most sectors and declines in manufacturing, while Boston cited mixed reports from business contacts and some slowdown since the previous report.

Most districts indicated that retail activity, including auto sales, had increased since the last Beige Book report, although Cleveland, Chicago, St. Louis, Dallas, and San Francisco noted the retail improvements were small. Atlanta said that retail growth had slowed, while Philadelphia indicated growth in retail sales was somewhat faster than in the previous report. Boston, New York, Richmond, Atlanta, Minneapolis, and San Francisco recorded strong performance in tourism. Many districts reported some softening in manufacturing, either a slowdown in the rate of growth or a decline in the level of sales, output, or orders; among those with declining shipments and orders, Philadelphia noted that the rate of decline was tempering.

Bankers in New York, Philadelphia, Cleveland, Atlanta, Chicago, and Kansas City saw increases in demand for most loan types in recent months. By contrast, St. Louis, Dallas, and San Francisco indicated that loan demand was mixed, softening, or slightly weaker.

Real estate markets were generally said to be improving. Reports on commercial real estate markets were generally positive.

The Midwest drought has reduced actual and expected farm output, especially cotton, soybean, and/or corn crops in the Chicago, Kansas City, and St. Louis districts. Several districts noted concerns about rising agricultural commodity prices.

Hiring was said to be modest across the Districts, and wage pressures were characterized as contained.

-Source: Federal Reserve

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