NEW YORK – While economic activity remains low, modest improvements have been reported, and those improvements are broader geographically than seen in the prior report, according to the Beige Book, which was released today.
“Ten Districts reported some increased activity or improvement in conditions, while the remaining two—Philadelphia and Richmond—reported mixed conditions,” according to the Beige Book. In the prior report, eight districts noted increased activity or improving conditions and four saw little change and/or mixed conditions.
Most districts reported consumer spending was up from 2008, but way below 2007 levels. Retail inventory remains “very lean in nearly all districts”. Auto sales were steady or up slightly since the last report in most Districts. Tourism was mostly flat or weak, except in two districts where ski resorts enjoyed early season snowstorms.
Nonfinancial services activity generally improved. Transportation services volumes were slightly up or mixed in the five districts reporting.
Manufacturing activity has increased or held steady since the previous Beige Book. The manufacturing outlook was optimistic, but spending plans remain cautious.
“Toward the end of 2009, home sales increased in most districts, especially for lower-priced homes. Home prices appeared to have changed little since the last Beige Book, and residential construction remained at low levels in most districts,” the report said. “Commercial real estate was still weak in nearly all districts with rising vacancy rates and falling rents. Since the last report, loan demand continued to decline or remained weak in most districts, while credit quality continued to deteriorate. Cold weather at the end of the year adversely affected some late crops and stressed livestock, but above-average yields for early crops were reported by some districts. Energy-related production has risen moderately since the last Beige Book.”
The labor markets stayed depressed, despite reports of some hiring in a few Federal Reserve Districts, with modest wage increases appearing in just a few districts. Price pressures remained subdued in nearly all districts, though increases in metals prices were reported and agricultural prices have been mixed.
