The Federal Reserve’s latest of roundup of economic conditions in the nation’s 12 regions sings a familiar tune to reports from the last three or more months: that growth is still occurring in the U.S. economy, but at a noticeably slower pace.
Slow and modest growth is the name of the game, said the latest edition of the Federal Reserve's Beige Book, unveiled Wednesday. Part of the reasoning for the lasted moderation of the growth pace, especially in the middle of the country, was concern over political disruptions in the run-up of the debt ceiling debate and shutdowns of some governments entirely, particularly Minnesota. Also in play in many of the central region is wrench that unpredictable weather has thrown into matters in the agricultural sector. Those in the agriculture industry who did see their crops survive did enjoy high prices for their commodities. However, such higher costs because of weather-related supply reductions and the aftermath of the previous six-week period’s gas price spike, mean businesses around the nation had to contend with higher costs of doing business. One light at the end of the tunnel, however, is the belief/hope among Fed contacts that falling gas/oil prices during the latest six-week tracking period will continue in the coming months, providing a boost for growth.
Manufacturing remained steady in most districts, though some slowing of growth levels was reported. An uptick in auto production returned as Japanese supply-chain disruptions finally started easing. Granted, auto producers still are playing from behind, so to speak, and the back-up could lead to slower automotive and auto-parts sales for a bit longer.
Credit conditions have changed little, through there were some reports of the cost of capital dropping amid inter-bank competition for well-regarded business borrowers (Richmond, Atlanta, Chicago, Dallas, San Francisco). Commercial real estate was about split down the middle between the have’s reporting improvement and the have not’s continuing to report weak conditions.
To view the full 12-region Fed Beige Book report, click here.
Brian Shappell, NACM staff writer