On Wednesday the Fed released the "Beige Book", a largely anecdotal report on the current economy from each of the 12 Fed districts which is released prior to the policy meeting it is created for. The picture is no different than what the economic reports suggest but serves as another early indicator on how the Fed will react after the January 28 policy meeting given the near zero policy rate -- 0% to 0.25% range. I've further summarized the report below, go to this link for the full report.
Overall economic activity continued to weaken across almost all of the Federal Reserve Districts. Retail sales were generally weak, particularly during the holiday season. Vehicle sales were also weak or down overall. Manufacturing activity decreased in most Districts. Services sector activity generally declined across the Districts.
Conditions in residential real estate markets continued to worsen in most Districts. Reduced home sales, lower prices, or decreases in construction activity were noted in many Districts. Commercial real estate markets deteriorated in most Districts.
Overall lending activity declined in several Districts, with tight or tightening lending conditions reported in most Districts. Credit quality remained a concern in several Districts.
Most Districts reported a general weakening of labor market conditions. Wage pressures remained largely contained, and some Districts reported pay freezes or reductions in compensation.
On the inflation front, lower energy prices were noted in many of the Districts as most noted declining input prices and sizable holiday price cuts.
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