The Federal Reserve Board Released "The Beige Book" Today (Data on Current Economic Conditions)

 
2008 Summary of Commentary on
Current Economic Conditions

Commonly known as the Beige Book, this report is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis. 

Consumer spending was down. Factory activity was slow. Even more worrisome was the downturn in "nonfinancial services," which has been the backbone of economic activity. Most districts also reported slower commercial real-estate activity. At the same time, credit was scarce as banks tightened standards due the stresses on the financial system. There were reports that loan quality had deteriorated. Bank customers were taking steps to move their savings into accounts covered by deposit insurance.

After reports throughout the year of higher prices, this Beige Book found that inflation pressures did ease a bit, especially on the retail side. Labor-market conditions also deteriorated and wage pressures remained muted. The agricultural sector was one bright spot, the report said.

The Beige Book, named for the color of the report, is designed to give the Fed a better feel for economic conditions in the run-up to its next policy meeting, scheduled for October 28 to 29. All indications are that the financial market is expecting another interest-rate cut.

What do you think is the next move by the Federal Reserve?

For a copy of today's release click on The Beige Book Image.