Federal Reserve: Economic Growth Slow but Steady in All Regions

Economic activity expanded in all 12 Federal Reserve Districts during the current reporting period, according to the latest Beige Book from the Federal Reserve.

The pace of growth was characterized as moderate in the Boston, New York, Richmond, Chicago, Minneapolis, Dallas and San Francisco Districts, and modest in the remaining regions. Compared with the previous report, the pace of growth picked up in the Cleveland and St. Louis Districts but slowed slightly in the Kansas City District.

Consumer spending expanded across almost all Districts, to varying degrees. Non-auto retail sales grew at a moderate pace across most of the country. Although improved weather generally gave a boost to business, lingering wintery weather in the Northeast continued to weigh on sales in parts of the Boston and New York Districts. Increasingly strong new vehicle sales were reported by more than half the Districts, with most other regions seeing steady sales; demand was generally reported to be less robust for used vehicles than for new vehicles. Tourism was steady to stronger across most of the country, particularly in most of the eastern seaboard Districts.

Manufacturing activity expanded throughout the nation, and at an increasingly strong pace in a number of Districts, notably along the East Coast, as well as in the St. Louis and Kansas City Districts.

Residential real estate activity was mixed across the country, with some reports of low inventories constraining sales, specifically in the Boston, New York and Kansas City Districts. Still, home prices continued to increase across most of the country, while the markets for both condos and apartment rentals were mostly robust. Residential construction activity was mixed, with half the Districts reporting increases but a few indicating some weakening in activity; multi-family construction remained particularly robust. Both non-residential construction activity and commercial real estate markets were generally steady to stronger since the last report.

Among Districts reporting on agriculture, drought conditions caused problems in the Dallas and San Francisco Districts, and, to a lesser extent, in the Chicago District; conversely, Atlanta and Minneapolis reported that excessive moisture delayed plantings. Energy industry activity strengthened in most Districts, though coal production was steady in Cleveland and declined in the Richmond District.

Labor market conditions generally strengthened in the latest reporting period, with hiring activity steady to stronger across most of the country, and several Districts reporting shortages of skilled workers. In most Districts, wage increases have remained generally subdued, though Chicago and Dallas noted increased costs for health benefits.

Prices of both inputs and finished goods and services were mostly steady to up slightly.