Fed Beige Book: Housing Still Weakest Sector

October 21 2010 (Chris Moore)
federal-reserve-building
The Federal Reserve released its periodic “Beige Book” survey on Wednesday and reported that the economy is growing slowly with some bright spots in manufacturing, travel, tourism and auto sales, but joblessness continues to be at 9.6 percent and housing remains the weakest sector.

The report, which was released on Wednesday, was slightly more upbeat than the previous one, which noted widespread signs of decelerating growth. However, it said that consumers remained focused on buying necessities and most housing markets across the US were still weak, with sales down from a year ago.

“The Beige Book was particularly beige this month, with no great surprises one way or the other,” David Ader, head of government bond strategy at Stamford, Connecticut-based CRT Capital Group LLC, wrote in a note to clients. “In and of itself, we’d not say this nails the coffin of QE, but does nothing to detract from it, either.”

Philadelphia, Dallas, and Kansas City reported increasing home sales. Kansas City, New York, and Minneapolis reported declining home prices. Home builders continue to report declining price pressures. There is likely to be little construction through the end of the year.

The only reported growth in commercial real estate is in apartments.