NEW YORK – Economic activity expanded in September at less than stellar rates, while business conditions outlooks were “weaker or less certain,” according to the Federal Reserve Board’s Beige Book report, released Wednesday.
Consumer spending was slightly better in most districts, led by gains in auto sales and tourism, while businesses shelled out “somewhat” more, “but many districts noted restraint in hiring and capital spending plans.”
Manufacturing and transportation activity “increased on balance,” the report said. A few districts saw “slight improvements in construction and real estate activity,” although overall residential and commercial real estate activity remained weak.
Nonfinancial services activity was “mixed” by district and industry.
Loan demand was down, excluding mortgage refinancing.
By sector, consumer spending rose slightly, as vehicle sales were better with supply disruptions stemming from the Japanese disaster cleared. Non-auto retail sales were flat or lower in September, although Philadelphia, Richmond, and Dallas reported customer traffic increased late in September into early October, while New York was buoyed by back-to-school sales.
Boston, Chicago, Kansas City, and Dallas saw a pick up in big-ticket or luxury item sales, while Minneapolis and Chicago reported shoppers stocking up noted on value products at groceries, rather than brand names.
Tourism was up, with New York, despite Hurricane Irene, tallying higher Broadway and hotel revenues. Boston, Atlanta, and Minneapolis said tourism was better, while “Richmond reported substantial damage from Hurricane Irene to some tourist destinations that were subsequently forced to close for repairs.”
Contacts reported “a weaker and more uncertain economic outlook had increased caution and was weighing on future spending plans” for businesses, excluding auto dealers. Philadelphia, Richmond, and Chicago said retailers “were reluctant” to stock up ahead of the holiday season.
