Beige Book: Less Bad Is the New Good

The Current Economic Conditions, aka The Beige Book, is a Federal Reserve report published 8X/year. Each Fed District gathers anecdotal information on current economic conditions in each District and reports back to the Fed.

The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis.

Current findings are that the “Pace of Economic Decline” is slowing.


Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level.

Five Districts used the words “slow”, “subdued”, or “weak” to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization. Minneapolis said the District economy had contracted since the last report.

Most Districts reported sluggish retail activity.

Manufacturing activity showed some improvement, with some moderation of declines and most other Districts indicated that manufacturing activity continued at low levels.

Residential real estate markets stayed soft in most Districts, although many noted some signs of improvement. By contrast, commercial real estate markets weakened further in recent months in two-thirds of the Districts and remained slow in the others.

Districts reported varied—but generally modest—price changes across sectors and products, with competitive pressures damping increases;

Most Districts indicated that labor markets were extremely soft, with minimal wage pressures, and cited the use of various methods of reducing compensation in addition to, or instead of, freezing or cutting wages.

Consumer spending in the early summer remained below previous-year levels in most Districts, as households continued to be price conscious.

Read the entire release for details on each district and sector.


JULY 2009

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