The latest Federal Reserve Beige Book, an economic conditions report released about eight times annually for the nation’s 12 Fed banking districts, finds a bit more of a mixed situation than the slow, yet steady growth reported for much of the year.
The Fed noted in the new Beige Book that a majority of districts remain in growth territory, but the tone seems less optimistic. Of particular concern appears to be the New York and Kansas City districts, both of which reported flat and/or softening sales. New York, notably, also had struggles to report in the real estate, commercial and residential (which showed a rare uptick again over the last six week period) as well as the all-important manufacturing sector. Also a bit off in manufacturing were the Boston and Philadelphia districts. Those reporting manufacturing improvement included Boston, Richmond, Atlanta, St. Louis, San Francisco and Kansas City. The rest essentially were middling. Whatever the district, vehicle sales continue to be supporting sales more than most product areas and, without its success, the numbers might look considerably bleaker.
Another area more on the radar than usual is that of agriculture (noted in the previous blog entry and this week’s Thursday NACM eNews release). The drought conditions continue to impair the Minneapolis, Chicago, Dallas and Kansas City Districts -- all off from average levels -- though there has been some needed improvement in crop conditions from the last two periods. However, problems earlier this year are showing up in feed prices, which have affected businesses in half of the 12 Fed districts.
On the finance side, loan demand and credit standards held relatively stable. There were noted improvements in several districts in loan quality and delinquency rate declines.
-Brian Shappell, CBA, NACM staff writer