Research >> Economics

Beige Book: Economic Activity expanded at a modest or moderate pace


Most Federal Reserve Districts have characterized economic expansion as modest or moderate since the prior Beige Book period. However, four Districts described little or no growth, and five narratives noted that activity remained below pre-pandemic levels for at least some sectors. Moreover, Philadelphia and three of the four Midwestern Districts observed that activity began to slow in early November as COVID-19 cases surged. Reports tended to indicate higher-than-average growth of manufacturing, distribution and logistics, homebuilding, and existing home sales, although not without disruptions. Banking contacts in numerous Districts reported some deterioration of loan portfolios, particularly for commercial lending into the retail and leisure and hospitality sectors. An increase in delinquencies in 2021 is more widely anticipated. Most Districts reported that firms' outlooks remained positive; however, optimism has waned--many contacts cited concerns over the recent pandemic wave, mandated restrictions (recent and prospective), and the looming expiration dates for unemployment benefits and for moratoriums on evictions and foreclosures.

Employment and Wages
Nearly all Districts reported that employment rose, but for most, the pace was slow, at best, and the recovery remained incomplete. Firms that were hiring continued to report difficulties in attracting and retaining workers. Many contacts noted that the sharp rise in COVID-19 cases had precipitated more school and plant closings and renewed fears of infection, which have further aggravated labor supply problems, including absenteeism and attrition. Providing for childcare and virtual schooling needs was widely cited as a significant and growing issue for the workforce, especially for women—prompting some firms to extend greater accommodations for flexible work schedules. In several Districts, firms feared that employment levels would fall over the winter before recovering further. Despite hiring difficulties, firms in most Districts reported that wages grew at a slight or modest pace overall. However, many noted greater pressure to raise rates for low-skilled workers, especially in outlying areas. Staffing firms described greater placement success with competitive rates, and one firm instituted a minimum wage rate for its industrial clients.

Prices
In most Districts, firms reported modest to moderate increases of input prices, while the selling prices of final goods rose at a slight to modest pace. Contacts noted that COVID-19 cases have caused ongoing disruptions and delays among short-staffed producers and shippers—raising transportation costs, which are then passed through to buyers.

Highlights by Federal Reserve District
Boston
Manufacturers reported increased revenues from a year ago, including some strong gains. Retailers and staffing firms continued recovering toward pre-pandemic levels, while the hospitality and tourism sectors remained hard-hit. Uncertainty about the course of the pandemic, vaccines, and possible relief measures added caution to positive outlooks.

New York
The regional economy has been flat, and the labor market has remained weak. Manufacturing growth slowed, consumer spending and tourism were little changed, and a number of service industries saw declines in activity. Commercial real estate softened further, but most residential sales markets continued to show strength. Wages and other business input costs picked up modestly, while selling prices were little changed.

Philadelphia
Business activity held steady during the current Beige Book period and remained below levels attained prior to the onset of COVID-19. However, sharply rising COVID-19 cases triggered a downward trend in early November and heightened concerns over anticipated layoffs, foreclosures, evictions, and bankruptcies. Meanwhile, modest job growth, slight wage growth, and modest inflation continued.

Cleveland
Economic activity increased moderately, and staff levels increased slightly. Firms connected to IT, housing, and consumer durables fared better than those connected to travel, energy, and hospitality. Supply chain constraints boosted transportation costs and prices for certain construction and manufacturing inputs. Contacts expected a modest improvement in activity, but hiring plans were restrained because of the pandemic's uncertain path.

Richmond
The regional economy grew moderately in recent weeks. Employment rose and demand for some professional business occupations was strong. Wage and price growth were modest. The housing market remained robust, and commercial real estate leasing improved somewhat. Port and trucking volumes reached robust levels and manufacturing activity picked up.

Atlanta
District economic activity modestly expanded. Labor markets continued to improve. Contacts noted some nonlabor costs rose. Retail activity and auto sales were mixed. Activity in tourism and hospitality picked up slightly. Residential real estate demand was strong and home prices rose. Commercial real estate conditions remained challenged. Manufacturing activity increased. Conditions at financial institutions stabilized.

Chicago
Economic activity increased moderately but remained below its pre-pandemic level. Employment, consumer spending, and manufacturing increased moderately; business spending increased modestly; and construction and real estate was flat. Wages rose slightly, as did prices. Financial conditions improved modestly. Strong harvests, government support, and higher prices boosted expectations for farm income.

St. Louis
Reports from District contacts suggest economic activity has continued to increase slightly since our previous report; however, conditions deteriorated toward the end of the reporting period. The overall outlook for business conditions over the next 12 months has improved but remains slightly pessimistic.

Minneapolis
District economic activity grew moderately. Employment rose modestly, but obstacles such as child care availability and virtual schooling for households with children impacted labor participation, particularly among women. Consumer spending grew slightly, with softening demand in some segments due to rising COVID-19 infections. Manufacturers generally saw brisk growth. Agricultural conditions improved slightly.

Kansas City
Economic activity continued to expand slightly. After rising in October, consumer spending fell slightly in November but was expected to bounce back in the coming months. Contacts in the manufacturing, residential real estate, wholesale trade, transportation, and professional and high-tech services sectors all reported increased levels of activity. In addition, the energy sector held steady, and the agriculture sector improved moderately.

Dallas
Economic activity expanded modestly. Growth moderated in the manufacturing, retail, and services sectors. The housing market continued to outperform expectations, but office leasing remained weak. Energy activity remained depressed though it showed further signs of improvement. Outlooks were positive, though highly uncertain due to looming concerns surrounding political uncertainty and the unknown course of the pandemic.

San Francisco
Economic activity in the District expanded modestly. Employment levels increased slightly, while price inflation showed little change. Sales of retail goods rose appreciably, but conditions in the services sector were unchanged. Manufacturing expanded moderately, and the agriculture sector improved slightly. Residential real estate activity continued to grow, while commercial markets changed little. Lending activity increased mildly.




Posted: December 2, 2020 Wednesday 02:00 PM




Tags - Research
ADP EMPLOYMENT
BEIGE BOOK
BUSINESS BAROMETER
BUSINESS INVENTORIES
CASE-SHILLER
CEO CONFIDENCE
CHALLENGER LAYOFFS
CHICAGO FED MIDWEST MFG
CHICAGO FED NATL ACTIVITY
CHICAGO PMI
CONSTRUCTION SPENDING
CONSUMER CONFIDENCE
CONSUMER CREDIT
CPI
CURRENT ACCOUNT
DURABLE GOODS
EMPLOYMENT COST INDEX
EMPLOYMENT TRENDS INDEX
EXISTING HOME SALES
FACTORY ORDERS
FOMC STMT
FOMC
GDP
HELP WANTED HWOL
HOUSING STARTS
ICSC CHAIN STORE
IMPORT PRICE INDEX
INDUSTRIAL PRODUCTION
INTERNATIONAL TRADE
ISM MFG
ISM NON-MFG
JOB OPENINGS
JOBLESS CLAIMS
KANSAS CITY FED MFG
LEADING INDEX
MASS LAYOFFS
MICH CONSUMER CONFIDENCE
MORTGAGE APPS
NAHB INDEX
NAPM-NY
NBER
NEW HOME SALES
NEW YORK FED MFG
NFIB OPTIMISM INDEX
NONFARM EMPLOYMENT
PAYCHEX-IHS SMALL JOBS
PENDING HOME SALES
PERSONAL INCOME
PHILA FED FORECASTERS
PHILA FED MFG
PHILA FED NON-MFG
PPI
PRODUCTIVITY GROWTH
REAL HOURLY EARNINGS
RETAIL SALES
RICHMOND FED MFG
TEXAS FED MFG
TREASURY INTL CAPITAL
WHOLESALE INVENTORIES
Archives
Mar 2024
Feb 2024
Jan 2024
Dec 2023
Nov 2023
Oct 2023
Sep 2023
Aug 2023
Jul 2023
Jun 2023
May 2023
Apr 2023
Mar 2023
Feb 2023
Jan 2023
Dec 2022
Nov 2022
Oct 2022
Sep 2022
Aug 2022
Jul 2022
Jun 2022
May 2022
Apr 2022
Mar 2022
Feb 2022
Jan 2022
Dec 2021
Nov 2021
Oct 2021
Sep 2021
Aug 2021
Jul 2021
Jun 2021
May 2021
Apr 2021
Mar 2021
Feb 2021
Jan 2021
Dec 2020
Nov 2020
Oct 2020
Sep 2020
Aug 2020
Jul 2020
Jun 2020
May 2020
Apr 2020
Mar 2020
Feb 2020
Jan 2020
Dec 2019
Nov 2019
Oct 2019
Sep 2019
Aug 2019
Jul 2019
Jun 2019
May 2019
Apr 2019
Mar 2019
Feb 2019
Jan 2019
Dec 2018
Nov 2018
Oct 2018
Sep 2018
Aug 2018
Jul 2018
Jun 2018
May 2018
Apr 2018
Mar 2018
Feb 2018
Jan 2018
Dec 2017
Nov 2017
Oct 2017
Sep 2017
Aug 2017
Jul 2017
Jun 2017
May 2017
Apr 2017
Mar 2017
Feb 2017
Jan 2017
Dec 2016
Nov 2016
Oct 2016
Sep 2016
Aug 2016
Jul 2016
Jun 2016
May 2016
Apr 2016
Mar 2016
Feb 2016
Jan 2016
Dec 2015
Nov 2015
Oct 2015
Sep 2015
Aug 2015
Jul 2015
Jun 2015
May 2015
Apr 2015
Mar 2015
Feb 2015
Jan 2015
Dec 2014
Nov 2014
Oct 2014
Sep 2014
Aug 2014
Jul 2014
Jun 2014
May 2014
Apr 2014
Mar 2014
Feb 2014
Jan 2014
Dec 2013
Nov 2013
Oct 2013
Sep 2013
Aug 2013
Jul 2013
Jun 2013
May 2013
Apr 2013
Mar 2013
Feb 2013
Jan 2013
Dec 2012
Nov 2012
Oct 2012
Sep 2012
Aug 2012
Jul 2012
Jun 2012
May 2012
Apr 2012
Mar 2012
Feb 2012
Jan 2012
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Dec 2009
Nov 2009
Oct 2009
Sep 2009
Aug 2009
Jul 2009
Jun 2009
May 2009
Apr 2009
Mar 2009
Feb 2009
Jan 2009
Dec 2008
Nov 2008
Oct 2008
Sep 2008
Aug 2008






National Association for Business Economics
NABE

Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works.

CFA Institute

Quick Links
Barron's Online
Bloomberg
CNBC
CNBC TV Live
CNet Investor
Financial Times (UK)
Forbes
Kudlow Podcast
MSNBC TV Live
NBC News
NY Times
The Economist
TheStreet.com
Wall St Journal
Dismal Scientist
Dr. Ed Yardeni
FRED Graph
Lawrence Kudlow
GDPNow
NABE
ABC News
CNNfn
Institutional Investor
MarketWatch
Cash Prices - WSJ.com
Dollar Index
Dr. Jeremy Siegel
Market Map
NY RBOB Gas
PriceStats
Rig Count
Shadow Fed - SOMC
The Billion Prices Project
BankStocks.com
Dow Jones Indices
Morningstar
SP Indices
Mt Washington Observatory
Weather.com
Yahoo!!