The Federal Reserve recently published their latest issue of the Beige Book. It is available online.

The following is a brief list of it's overall (national) summary findings (using data as of April 7th):

1. Economic activity has slowed since the last report. Business activity has weakened in all but three Districts, Richmond, Boston and Cleveland, which has mixed or steady activity.

2. Consumer spending was softening over most of the county. Vehicle sales and retail activity were reporting year over year declines.  Retail inventories are steady or rising.  Philadelphia noted some relative strength in demand for luxury goods

3. Tourism generally was described as strong, particularly due to foreign visitors.

4. Reports were mixed in non-financial service industries. Demand for transportation services was generally weak, while business and health services expanded and other service industries reported mixed demands.  Shipping and freight activity was sluggish or weakening.

5. Manufacturing trends varied.  Housing and construction industries were described as "anemic".  Demand was strong for aerospace, aircraft and defense goods. Demands for metals and machinery had increased in the Philadelphia district.

6. Commercial market reports were steady or slowing. Reports were mixed among Districts as to absorption of commercial space. Rental conditions were weaker in a majority of the Districts.  Construction activity were mixed, with Philadelphia, Atlanta and San Francisco reporting weakened activity.  Philadelphia and several other Districts reported a weakness is commercial sales and prices; along with limited lending by banks.

7. Residential real estate markets remained "sluggish" in all districts and many reported a decline in sales activity along with a downward pressures or declines in selling prices. Residential construction declined or remained at low levels. Inventories remained high against low demand.  Lending at lower levels of the residential mortgage segment has stabilized, with lending for new homes termed sluggish.

8. Credit quality has generally deteriorated with increased delinquency rates.  Banks have tightened credit standards.

9. Favorable ("upbeat") agricultural performances were reported in much of the country generally due to higher crop prices and favorable growing conditions. However, despite poor conditions for drought-stricken areas in the Atlanta and Richmond Districts there was enough moisture from recent rains for spring planting. Some areas were shifting from corn to soybean production because of favorable soybean prices and higher cost of corn production.  Dairy and livestock producers have indicated the higher feed costs are reducing margins.

10. Energy activity was robust with steady to increasing prices. In Dallas District, drilling was strong and natural gas production continued to increase.  In Minneapolis District, expansion of the mining industry was underway while oil and gas exploration remained robust.   Increased demand for energy will continue to boost activity and prices. 

11. Employment levels remained relatively unchanged.  Most reported weakening in the job market with Philadelphia, Atlanta and Minneapolis Districts reporting layoffs or hiring freezes.  There were scattered shortages of skilled workers.  Staffing and temp agencies reported mixed labor demands.  Wages are largely unchanged or rising slightly.  Upward pressures were still being felt in sectors with skilled labor shortages.

12. Businesses contacted reported increases in input costs and output prices, with input costs increasing faster the output prices.  Most manufacturers are raising, or plan to raise, prices.  .According to most reports, businesses continued to face rising costs for food, petrochemicals, metals, and energy-related inputs. Transportation costs for most products increased. Businesses were passing various portions of the costs on to consumers.

Note: This represents the national summary for ALL districts combined. The report also provides more detail on each item summarized nationally, as well as reporting by each district on all items.

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.