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The Federal Reserve Board's latest Beige Book report was released this week, and the results are in line with reports from other agencies: the U.S. economy continued to deteriorate in January and February.
The report, a compilation of commentaries from each of the 12 Federal Reserve Districts, states that 10 of the 12 districts indicated weaker conditions or declines in economic activity, while Philadelphia and Chicago reported their regional economies remained weak.
Here's the overview: (Read the full report.)
Deterioration was broad-based, with only a few exceptions, including basic food production and pharmaceuticals. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.
Manufacturing activity fell in all Districts, with very sharp declines recorded for some sectors. For most Districts, the drop in activity was especially pronounced for makers of capital goods and construction-related equipment and materials, such as primary metals, wood products, and electrical equipment, along with consumer durables such as autos and furniture. Manufacturing of biotechnology products and pharmaceuticals, food processors and selected chemicals saw gains in some Districts.
Upward price pressures were very limited during the reporting period, as a result of lower energy and commodity prices and weak demand for final goods and services across a wide range of sectors.
Consumer spending remained sluggish, although many Districts noted some improvement in January and February when compared to the dismal holiday shopping season. Travel and tourist activity continued to fall in most areas, as households reduced their vacation travel and corporate travel spending was scaled back. Markets for residential real estate remained largely stagnant, with only minimal and scattered signs of stabilization emerging in some areas, while demand for commercial real estate weakened significantly. Reports from banks and other financial institutions indicated further drops in business loan demand, a slight deterioration in credit quality for businesses and households, and continued tight credit availability. "