Research >> Economics

Beige Book: Economic Activity expanded at a moderate pace, expectations softened


All twelve Federal Reserve Districts have reported continued economic growth since the prior Beige Book period, with a majority indicating slight or modest growth; four Districts indicated moderate growth. Four Districts explicitly noted that the pace of growth had slowed since the prior period. Contacts in most Districts reported ongoing growth in manufacturing. Retail contacts noted some softening as consumers faced higher prices, and residential real estate contacts observed weakness as buyers faced high prices and rising interest rates. Contacts tended to cite labor market difficulties as their greatest challenge, followed by supply chain disruptions. Rising interest rates, general inflation, the Russian invasion of Ukraine, and disruptions from COVID-19 cases (especially in the Northeast) round out the key concerns impacting household and business plans. Eight Districts reported that expectations of future growth among their contacts had diminished; contacts in three Districts specifically expressed concerns about a recession.

Labor Markets
Most Districts reported that employment rose modestly or moderately in a labor market that all Districts described as tight. One District explicitly reported that the pace of job growth had slowed, but some firms in most of the coastal Districts noted hiring freezes or other signs that market tightness had begun to ease. However, worker shortages continued to force many firms to operate below capacity. In response, firms continued to deploy automation, offer greater job flexibility, and raise wages. In a majority of Districts, firms reported strong wage growth, whereas most others reported moderate growth. However, in a few Districts, firms noted that wage rate increases were leveling off or edging down. Moreover, while firms throughout the country generally anticipate wages to rise further over the next year, one District indicated that its firms' expected rate of wage growth has fallen for two consecutive quarters.

Prices
Most Districts noted that their contacts had reported strong or robust price increases – especially for input prices. Two Districts noted that this rapid inflation was a continuation of trend; however, three Districts observed that price increases for their own goods or services had moderated somewhat – across the board (among Philadelphia firms) or for some segments (used cars in Boston and manufacturing in Richmond). About half of the Districts observed that many contacts maintained pricing power – passing costs on to clients and consumers, often with fuel surcharges. However, more than half of the Districts cited some customer pushback, such as smaller volume purchases or substitution of less expensive brands. Surveys in two Districts pegged year-ahead increases of their selling prices as ranging from 4 to 5 percent; moreover, one District noted that its firms' price expectations have edged down for two consecutive quarters.

Highlights by Federal Reserve District

Boston
Economic activity in the First District increased slightly amid robust wage and price growth. Labor scarcity remained a widespread problem as headcounts increased only slightly. Restaurant profits fell on steep input price increases. The outlook for summer tourism was bright, but many contacts' optimism was tainted by growing fears of recession.

New York
Growth slowed to a modest pace, with much of the slowing attributed to supply disruptions, worker shortages, and a COVID resurgence. Businesses added staff amidst high turnover. Tourism strengthened, but consumer spending and manufacturing activity weakened. Businesses continued to report widespread increases in prices and wages. Contacts were somewhat less optimistic about the near-term outlook.

Philadelphia
Business activity grew slightly – at a slower pace than in the prior Beige Book period, and some sectors remained below pre-pandemic levels. Rising prices and recession fears have turned consumers and firms more cautious. The labor market remained tight with modest growth. Wage and price growth continued to expand at a moderate and strong pace, respectively, although the pace of both eased somewhat lower.

Cleveland
Business activity decelerated and was slightly positive as firms grappled with ongoing supply chain challenges, tight labor market conditions, and escalating costs. Employment rose moderately. Contacts reported broad increases in wages, costs, and prices. Overall, contacts were less certain about the economic outlook and expected upward pressure on prices to persist.

Richmond
The regional economy grew modestly over the last several weeks. Consumer spending remained strong while manufacturers and service providers reported modest to moderate growth. Import activity slowed slightly, as did trucking demand. New vehicle and home sales were limited by low inventory levels. Employment increased modestly and wages continued to rise moderately. Overall, price growth remained robust.

Atlanta
Economic activity expanded at a modest pace. Labor markets remained tight, and wages continued to rise. Nonlabor costs rose. Retail sales moderated somewhat. Tourism activity remained strong. Housing demand softened slightly. Commercial real estate conditions remained mixed. Manufacturing activity was strong. Banking conditions were mixed.

Chicago
Economic activity increased modestly. Employment increased strongly, manufacturing was up moderately, consumer spending moved up modestly, business spending was slightly higher, and construction and real estate activity declined slightly. Wages and prices rose rapidly, while financial conditions deteriorated some. Agriculture income expectations for 2022 were little changed.

St. Louis
Economic conditions have improved at a modest pace since our previous report, although the outlook has weakened. Prices for raw materials and fuel increased robustly. Consumer spending showed increased signs of price sensitivity and a shift from goods to services. Manufacturing firms reported that a backlog of orders should sustain production even as orders slow due to higher prices.

Minneapolis
The region's economy grew moderately since mid-April. Demand across sectors remained strong but higher input and labor costs put downward pressure on profit margins. Construction and real estate contacts reported some slowing due to interest rate increases. Demand for credit among minority- and women-owned business enterprises was down amid uncertainty about the economy.

Kansas City
The Tenth District economy grew at a moderate pace, but expectations for future growth softened somewhat due to a variety of factors. Contacts noted a number of shifts in consumer behavior as prices continued to rise at a robust pace. Labor demand remained elevated, and the number of hours worked increased in recent weeks. Wage growth aimed at retaining workers was much faster than observed in recent years.

Dallas
Economic growth in the district slowed to a moderate pace. Growth remained largely broad-based, except for home sales and retail activity, which dipped. Prices rose at a rapid clip, though several firms noted diminished ability to fully pass on cost increases. Employment and wage gains generally remained solid. Outlooks weakened, and uncertainty increased because of rising headwinds.

San Francisco
Economic activity strengthened moderately over the reporting period. Conditions in the labor market remained tight. Wages and price levels increased significantly. Retail sales continued to increase while demand for services rose considerably. Conditions in the agriculture sector deteriorated somewhat. The residential real estate market remained robust overall, and lending activity was little changed.

Click to Link




Posted: June 1, 2022 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!!