Wednesday, April 15, 2015

Beige Book: “Moderate” to “Modest” Growth Reported

Economic activities continued to expand across most regions and sectors according to the March edition of the Federal Reserve Beige Book. Most of the 12 districts reported moderate to modest growth.

Banking conditions were positive across all districts. Credit demand increased at a slight to moderate pace in 7 districts. Commercial real estate loan demand was particularly strong in Atlanta and Dallas. Some San Francisco banks have generated a steady pipeline of pending loans, and have increased interest rates slightly to curb demand. C&I loans to areas associated with the energy industry have slowed due to low oil prices.

Consumer spending was mixed with 5 districts reporting higher than normal retail sales, while the other 7 districts reported sales were either down or flat—partly due to unusually cold weather. Retailers were optimistic about future sales and say that savings from lower energy prices are increasing sales for this cycle. Retailers in Dallas and New York expressed concern over the strong dollar.

Labor markets remained stable or improved in most districts. Five districts reported increases in employment; however layoffs were reported in the manufacturing and energy sectors of five districts, primarily due to declining oil and gas prices.

Manufacturing demand was mixed across districts and sectors. Aerospace reported some gains, while fabricated metal products and the chemicals industry weakened. Chemical producers attributed this to the strong dollar. The overall outlook from most districts was positive however.

Real estate activity improved or remained steady in all districts except New York, which reported softening conditions. Chicago reported that inventories were near historic lows, especially for lower priced homes. Cleveland and Philadelphia reported an absence of first time home buyers. Commercial real estate activity remained stable in most districts.

Read the Federal Reserve summary

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