WASHINGTON — The Federal Reserve's latest report on Current Economic Conditions released Wednesday contained no real surprises, echoing the June report in saying the recovery continues to improve at a moderate pace.
In fact "modest" and "moderate" were the modifiers that dominated the report, while "strong" was used only in a few places such as residential construction, tourism and auto sales.
Demand for residential construction fueled increases in manufacturing in most of the 12 Federal Reserve districts, and consumer spending was up, along with loan demand and credit quality, the so-called beige book said.
Hiring also increased, although there were some indications of reluctance to take on permanent or full time positions, the Fed said.
"Reports from the 12 Federal Reserve Districts indicate that overall economic activity continued to increase at a modest to moderate pace since the previous survey," the report said.
"Manufacturing expanded in most Districts since the previous report, with many Districts reporting increases in new orders, shipments, or production. Most Districts noted that overall consumer spending and auto sales increased during the reporting period," according to the report, prepared by the St. Louis Federal Reserve Bank with data through July 8.
But while "Hiring held steady or increased at a measured pace in most Districts," the report said in Philadelphia, Richmond and Chicago District firms "were cautious or reluctant to hire permanent or full-time staff."
At the same time wage pressures "remained limited or contained," while consumer input or price pressures were "stable or modest," good news for the inflation outlook. New York and San Francisco Districts "noted that competition for technology workers had an effect on salaries," the report said.
Auto sales and manufacturing provided one of the bright spots in the report, which said production was a "source of strength in the Chicago, St. Louis and Minneapolis Districts." While sales increased in most districts, "Strong sales were reported in the Philadelphia, Richmond, Atlanta, Chicago, and San Francisco Districts."
Other highlights included strength in construction and real estate sectors, as "Strong demand in residential construction continued to stimulate the manufacturing sector in several Districts," the beige book said.
Residential real estate "increased at a moderate to strong pace in most Districts," while commercial real estate "continued to improve."
Meanwhile, banking conditions "were generally positive across the Districts. Overall loan demand increased modestly across most reporting Districts," the beige book said, adding that credit quality showed "slight to moderate improvements."
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See
