Research >> Economics

Beige Book: Economic Activity expanded moderately


Economic activity expanded moderately in late April and early May with few shifts in the pattern of growth. The Dallas District was an exception, where overall economic activity sped up to a solid pace. Manufacturing shifted into higher gear with more than half of the Districts reporting a pickup in industrial activity and a third of the Districts classifying activity as "strong." Fabricated metals, heavy industrial machinery, and electronics equipment were noted as areas of strength. Rising goods production led to higher freight volumes for transportation firms. By contrast, consumer spending was soft. Nonauto retail sales growth moderated somewhat and auto sales were flat, although there was considerable variation by District and vehicle type. In banking, demand for loans ticked higher and banks reported that increased competition had led to higher deposit rates. Delinquency rates were mostly stable at low levels. Homebuilding and home sales increased modestly, on net, and nonresidential construction continued at a moderate pace. Contacts noted some concern about the uncertainty of international trade policy. Still, outlooks for near term growth were generally upbeat.

Employment and Wages
Employment rose at a modest to moderate rate across most Districts. Again, the Dallas District was the exception, where solid and widespread employment growth was reported. Labor market conditions remained tight across the country, and contacts continued to report difficulty filling positions across skill levels. Shortages of qualified workers were reported in various specialized trades and occupations, including truck drivers, sales personnel, carpenters, electricians, painters, and information technology professionals. Many firms responded to talent shortages by increasing wages as well as the generosity of their compensation packages. In the aggregate, however, wage increases remained modest in most Districts. Contacts in some Districts expected similar employment and wage gains in the coming months.

Prices
Prices rose moderately in most Districts, while the remainder reported slight or modest increases. There were several reports of rising materials costs, notably for steel, aluminum, oil, oil derivatives, lumber, and cement. A few Districts noted that these reports of rising materials costs were becoming more common across contacts. Input cost increases, along with labor shortages in some sectors and strengthening demand, put upward pressure on prices in the transportation, construction, and manufacturing sectors. Some Districts also noted that their retail contacts were more able to pass along price increases to their customers than in the recent past.

Highlights by Federal Reserve District

Boston
Business activity continued to expand at a moderate pace, with contacted manufacturers, retailers, and most staffing firms reporting year-over-year increases in revenues. While some firms said prices were increasing more than last year, others indicated no unusual pressure. Most hiring firms noted tight labor markets; some--including staffing firms--said wages were rising.

New York
Economic growth continued at a modest pace, while labor markets have tightened further. Input price pressures have broadened, and selling price increases have picked up somewhat. Housing markets have firmed slightly, while commercial real estate markets have softened.

Philadelphia
Economic activity continued to expand at a modest pace. Wage pressures were emerging in some tighter labor markets, but wage and price increases remained modest overall, as did job growth. Notably, nonfinancial services accelerated to a moderate pace, and auto sales appeared to reverse several periods of decline, posting a slight increase.

Cleveland
The District economy expanded at a moderate pace. Labor markets tightened, with wage pressures noted broadly. Rising commodities prices and transportation costs are pressuring goods producers. Stronger confidence in the economy boosted demand in manufacturing, banking, and nonfinancial services. Consumer demand increased modestly. Construction activity remained robust.

Richmond
The regional economy expanded moderately. Robust demand and a shortage of drivers led some trucking firms to turn away business which, in turn, increased demand for rail services. Home sales were steady, while inventories remained limited. Labor demand continued to strengthen and supply remained tight across industries. Prices rose moderately, overall.

Atlanta
Economic activity grew at a modest pace. Tightness continued in the labor market with firms noting increased efforts to attract and retain workers. Reports of wage growth were mixed. Overall retail sales rose and light truck sales were robust. Real estate activity improved slightly. Manufacturers noted increases in new orders and production. Loan growth remained firm.

Chicago
Growth in economic activity continued at a moderate pace. Manufacturing increased strongly, employment grew moderately, consumer and business spending rose modestly, and construction and real estate increased slightly. Wages and prices increased modestly and financial conditions improved modestly. The outlook for farm income brightened.

St. Louis
Economic conditions improved slightly. Wage growth was moderate. Some firms have begun relaxing drug-testing standards and restrictions on hiring felons to alleviate labor shortages. District bankers reported weaker demand for new loans and a decline in creditworthiness of loan applicants. Firms surveyed in mid-May were slightly less optimistic about the rest of 2018 as those surveyed in mid-February.

Minneapolis
Ninth District economic activity increased moderately. While labor demand appeared robust, employment growth was restrained by a tight labor supply. Wage growth was moderate, while price pressures increased slightly, particularly at the wholesale level. District manufacturers were experiencing robust growth but also were experiencing supply-chain disruptions as a result of uncertainty over trade policy.

Kansas City
Overall economic activity in the Tenth District increased moderately, with further growth expected in coming months. Manufacturing activity expanded at a rapid pace, while consumer spending, energy, and business services grew moderately. Agricultural conditions weakened but at a slower pace, while District employment and wages rose modestly.

Dallas
Economic activity grew at a solid pace, with an acceleration in manufacturing activity. Expansion in the services, energy, and real estate sectors continued at about the same pace. Retail spending was mixed and drought conditions persisted in parts of the District. Hiring remained solid despite a tight labor market, and wage and price pressures stayed elevated. Contacts expressed concern about trade uncertainty and rising interest rates, although outlooks overall remained positive.

San Francisco
Economic activity in the Twelfth District continued to expand at a moderate pace. Sales of retail goods edged up, and activity in the consumer and business services sectors expanded slightly. Activity in the manufacturing sector was solid. Activity in residential real estate markets remained solid, and conditions in the commercial real estate sector picked up notably. Lending activity ticked up modestly.





Posted: May 30, 2018 Wednesday 02:00 PM




Tags - Research
ADP EMPLOYMENT
BEIGE BOOK
BUSINESS BAROMETER
BUSINESS INVENTORIES
CASE-SHILLER
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
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




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
Stone McCarthy
GDPNow
NABE
ABC News
CNNfn
Institutional Investor
MarketWatch
Cash Prices - WSJ.com
Dr. Jeremy Siegel
Market Map
NY RBOB Gas
Shadow Fed - SOMC
BankStocks.com
Dow Jones Indices
Morningstar
SP Indices
Mt Washington Observatory
Weather.com
Yahoo!!




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

The Financial Crisis Inquiry Commission was created to examine the causes, domestic and global, of the current financial and economic crisis in the United States.

The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform