The newest release of the Federal Reserve’s Beige Book offers more evidence that the economic recovery has failed to gain much traction across much of the nation. The report, which is a summary of reports from business contacts within each of the Federal Reserve’s 12 individual districts, indicated economic growth has moderated in the majority of districts. In particular, the Fed noted “the six Districts near the Atlantic seaboard reported a slowdown in activity since the previous Beige Book report.”
Among the sectors covered by the survey, manufacturing activity expanded across the majority of Fed Districts and received a bump in a few areas as the auto manufacturing supply chain disruptions started to wane. Nonfinancial services companies were generally optimistic throughout the nation, with high-tech firms in a few regions citing positive outlooks for capital spending. Consumer spending firmed in most districts, but some retailers expressed caution about the outlook due to high gas prices, general economic uncertainty and price pressures from suppliers. Auto sales slowed from the previous report as some dealers continued to struggle with lean inventories caused by Japanese supply chain problems.
For the real estate market, the Beige Book offered this generally somber assessment:
Most residential real estate activity was little changed and remained weak, although construction and activity in the residential rental market continued to improve since the previous Beige Book. For six Districts, activity in the nonresidential real estate market has improved slightly for specific submarkets, although conditions generally remained weak across all twelve Districts. Since the last Beige Book, overall loan volumes have increased in three Districts, decreased in two Districts, and were relatively flat, often with mixed trends across the banks’ portfolios, in five Districts. Credit quality was steady or improving.