NEW YORK – Continued economic improvement, viewed by some districts as “moderate,” but mostly “widespread” were reported in the Federal Reserve Beige Book, released Wednesday.
Kansas City called its economic gains “solid.” Manufacturing was at the forefront, with nearly every district reporting steady improvement, often resulting in increased hiring.
Consumer spending was “robust” in New York, while Boston termed the retail sector “mixed,” and Richmond said they were “weak.”
“Loan demand was either unchanged or up slightly in most Districts, with New York, St. Louis, and Kansas City citing weaker lending,” the beige book said. “While most Districts noted little change in their residential real estate markets, half of the Districts cited at least pockets of weakening.”
Short-term, the outlook was upbeat, but some districts also noted that uncertainties remained high. “Boston, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, and Dallas all noted actual or expected disruptions to sales and production as a result of the tragedy in Japan. Most Districts reported signs of improvement in at least some of their labor markets and Boston, Richmond, Chicago, and Kansas City cited examples of concern among their contacts about being able to obtain certain types of skilled workers. Some businesses in the Philadelphia and Cleveland Districts still preferred to hire temporary over permanent workers.”
Wage pressures were mostly called “weak or subdued, but higher commodity costs were widely reported to be putting increasing pressures on prices. Energy prices were cited most often, but raw materials in general were an increasing concern of businesses. The ability to pass through cost increases varied across Districts, with manufacturers generally finding less resistance to price increases than either retail or construction (where weak demand was a limiting factor).”
