The latest Beige Book from the Federal Reserve indicates that conditions have improved "modestly" and the improvements are much broader geographically than in the last Beige Book report. Ten Fed districts reported increased activity or improvement, while the remaining two – Philadelphia, PA, and Richmond, VA – reported mixed conditions.
Some of the highlights:
- Auto sales held steady or increased slightly since the last Beige Book report in most districts.
- Manufacturing activity has increased or held steady since the last report in most Districts. Among Districts reporting on near-term expectations, the manufacturing outlook was optimistic, but spending plans remained cautious.
- Toward the end of 2009, home sales increased in most Districts, especially for lower-priced homes. Residential construction remained at low levels in most Districts. Commercial real estate was still weak in nearly all Districts with rising vacancy rates and falling rents.
- Since the last report, loan demand continued to decline or remained weak in most Districts, while credit quality continued to deteriorate.
- Energy-related production has risen moderately since the last Beige Book.
- Although some hiring was reported in a few Federal Reserve Districts, labor market conditions remained generally weak with modest wage increases appearing in just a few Districts.
- Price pressures remained subdued in nearly all Districts, though increases in metals prices were reported and agricultural prices have been mixed.