Wednesday, December 3rd, 2008
Beige Book Cast Gloomy Picture
Today the Federal Reserve released the Beige Book, which recounts economic conditions over the preceding month. Overall, there were not many surprises — the economy is weak and getting weaker.
Instead of recapping the obviously weak conditions, I parsed the report and pulled out anything that could be construed as “positive”.
The Silver Lining In November’s Beige Book
- However, Kansas City noted an increase in demand for used cars.
- In contrast, reservations at a ski resort in the Richmond District were somewhat stronger for the Thanksgiving and Christmas holidays, and some tourism businesses in the Minneapolis District were cautiously optimistic for the winter season in part due to lower gasoline prices.
- Minneapolis and Dallas reported growing demand for bankruptcy services, and Richmond noted that telecommunications and CPA firms were facing strong demand.
- Boston, Chicago, St. Louis and San Francisco noted stronger demand for aerospace manufacturers. St. Louis, Dallas and San Francisco reported increases in food processing.
- Philadelphia, Richmond, Chicago and Kansas City reported relatively stronger demand for lower- and middle-priced “starter homes.”
- In contrast, Philadelphia indicated that its banks saw loan volume rise in November, and some regional banks reported picking up new business borrowers. Cleveland reported that business loan volume has been steady to higher, and some bankers reported actively marketing their loan business.
- However, demand for skilled labor remained strong in Chicago, contacts in Boston reported difficulty filling open positions in some professions and Minneapolis cited difficulty finding skilled workers in some areas.
- Chicago, Kansas City and Dallas reported minimal wage pressures. In San Francisco, the region’s few open positions have been attracting large numbers of applicants, thereby alleviating upward wage pressures.
- District reports characterized price pressures as easing in light of some decreases in retail prices and declines in input prices, particularly for energy, fuel, and many raw materials and food products.
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