Highlights of the Fed’s Beige Book report on economic conditions:
- Spending increased in most regions with improved weather
- Manufacturing improved in most districts
- Several districts said weather impact was less severe than earlier in the year
- Labor market conditions mixed but generally positive, wage pressures contained
- The previous report said the outlook among most Districts remained optimistic
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Not much stands out from the Beige Book and the market reaction has been negligible but the bit on wage pressures is notable. There are small, brewing fears of wage inflation in markets.
In most Districts, wage pressures were contained or minimal. The New York District reported scattered wage pressures and Cleveland reported that wage pressures were contained. However, there were several reports of upward wage pressures in the Dallas District.
Overall, most districts suggested mediocre growth or slight improvement.
The expansion was characterized as modest or moderate by the Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco Districts. Chicago reported that economic growth had picked up, and New York and Philadelphia indicated that business activity had rebounded from weather-related slowdowns earlier in the year. The Cleveland and St. Louis Districts both reported a decline in economic activity.
The best news is on the consumer spending side where there was optimism. They even highlighted record seasons at ski resorts.
