Fed Beige Book: More Slow Growth

Aside from weaker results from the St. Louis District, economic activity increased at a “slow to moderate pace” across the nation according to the latest release of the Federal Reserve’s Beige Book. The majority of Fed Districts reported modest gains in consumer spending, both auto and non-auto sales, and most had positive expectations for holiday sales. Tourism activity appeared to be improving across all Fed Districts, with particularly strong hotel bookings and occupancy rates reported for Boston, New York, Richmond, Atlanta, Minneapolis, and San Francisco.

Manufacturing activity expanded in every district except for St Louis, with producers indicating stronger readings on shipments, orders and production. Results were mixed, however, at the industry level, with autos, high-technology and energy-related equipment seeing the largest gains in demand. Most areas witnessed an improvement in overall bank lending activity compared to the last report, but the improvement was largely centered on certain types of business lending and home loan refinancing. Lending standards remained tight for new mortgages and business construction and development loans.

The residential real estate market remained weak, mostly on the weight of sluggish single-family housing construction. Some improvements in the multifamily/rental market were reported in several districts. According to the report:

Overall residential real estate activity increased, but conditions were varied across Districts. Philadelphia, Richmond, Minneapolis, Kansas City, and Dallas noted increased activity. New York, Boston, Cleveland, and San Francisco reported flat activity at relatively low levels. Atlanta and St. Louis indicated decreased sales. Residential construction remained sluggish. Single-family home construction remained weak, while multifamily construction picked up in New York, Philadelphia, Cleveland, Chicago, and Minneapolis. San Francisco remained “anemic,” while St. Louis and Kansas City reported decreased activity.

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