Reports from the twelve Federal Reserve Districts suggest economic activity increased in most regions of the country since the previous report, according to the latest Beige Book from the Federal Reserve.
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.
Manufacturing improved in most Districts. Several Districts reported that the impact of winter weather was less severe than earlier this year. Chicago and Minneapolis saw moderate growth, while manufacturing grew at a steady pace in New York, Atlanta, St. Louis, and Dallas. San Francisco noted that manufacturing appeared to gain some momentum. Other Districts noted mild growth, except Richmond, where manufacturing activity was mixed. Demand for food production declined in the Boston, Richmond, and Dallas Districts; however the drop was primarily weather related. Steel production picked up in several districts.
Consumer spending increased in most Districts, as weather conditions improved and foot traffic returned. Auto sales were up in the New York, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, and San Francisco Districts, but they were little changed from a year earlier in Kansas City and Cleveland. In addition, assessments of tourism were generally positive, particularly for the Districts of Philadelphia, Richmond, and Minneapolis, where ski resorts had record seasons. Summer bookings were also solid in several Districts.
Reports on residential housing markets varied. However, across most Districts, home prices rose modestly and inventory levels remained low. Residential construction increased in several Districts; only Cleveland, St. Louis, and Minneapolis reported a decrease. Commercial construction also strengthened, with the exception of Cleveland, which reported a mild decline. Commercial leasing activity generally advanced at a modest pace. Industrial markets showed signs of tightening in downstate New York and northern New Jersey.
Labor market conditions were mixed but generally positive. The New York, Cleveland, Richmond, Chicago, Kansas City, and Dallas Districts reported difficulty finding skilled workers. 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.