Beige Book: Economy Expanding Gradually

July 23, 2012 (Chris Moore)

Current economic activity from the beginning of July through early August was described as expanding gradually in all twelve Federal Reserve Districts according to the latest edition of the Beige Book released by the Federal Reserve.

Six of the Districts reported modest economic growth, while three Districts reported that economic activity was expanding at a moderate pace and three Districts reported growth had slowed with some declines in activity.

Retail activity was reported to have improved in most Districts though Cleveland, Chicago, St. Louis, Dallas, and San Francisco reported that the improvement in retail activity was small. Most of the increase in sales was attributed to higher auto sales. Overall, most Districts reported that retail spending was up compared to the previous report.

Many Districts reported that manufacturing had softened with either a slowdown in the rate or growth or a decline in orders. The Boston, Chicago, Kansas City and San Francisco Districts reported demand was small and uneven but increasing while six Districts reported a modest decline in manufacturing. Other industries that reported a slowdown or a decline were staffing services, technology, and non-financial services.

Housing activity continued to show signs of improvement with most Districts reporting improvement in sales and construction. Declining housing inventories was putting upward pressure on prices in several Districts. Dallas and Richmond reported stong levels of buyer traffic and pending sales while New York, Philadelphia and Chicago reported activity was slow and modest.

Inventories were reported to be declining in Boston, New York, Philadelphia, Atlanta, Dallas, and San Francisco with declining inventories of distressed properties reported in New York, Richmond, and San Francisco.

Multi-family construction continued to remain strong as demand for apartment rentals strengthened in most Districts. Boston, New York, Philadelphia, Cleveland, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco all reported elevated levels of demand for multi-family construction.

Single-family home construction continued to struggle in several districts, though construction levels were still much improved from year ago levels.

Overall loan demand was reported as varying among the Districts with Richmond and Atlanta reporting low demand with St. Louis and San Francisco reporting some small positive changes in loan demand. Dallas reported that loan demand overall had softened while New York and Philadelphia reported increased activity in most lending categories.

Most Districts reported that credit quality had increased from the previous report with New York, St. Louis, and Kansas City reporting that credit standards remained generally unchanged from the previous periods.

Tags: Federal Reserve, Beige Book, housing market, real estate markets, single family homes, multifamily market, construction activity

Source:
Federal Reserve