Economic activity expanded across most of the twelve Federal Reserve Districts, according to the May 2016 edition of the Federal Reserve Beige Book. Most Districts reported moderate growth, while some reported that the pace of growth slowed.
Banking conditions remained positive as loan demand increased moderately in all but the Dallas District, which reported that lending was mixed overall. Banks in Philadelphia, Cleveland and Dallas reported increased auto lending, while St. Louis and San Francisco banks reported improved credit quality.
Construction and real estate activity expanded since the previous Beige Book, with strong commercial construction activity and project pipelines reported in several Districts. Atlanta noted one-to-two year backlogs. Residential construction and commercial real estate activity also increased in most Districts. Sales for entry-level and low priced houses were strong.
Labor conditions strengthened between April and May with most Districts noting tight labor markets. Contacts in the Boston District noted robust demand for high-skilled workers, while contacts in several other Districts noted increasing difficulty in finding highly-skilled workers to fill positions. These difficulties placed upward pressure on wages. In contrast, soft labor markets were reported in energy related sectors.
Consumer spending increased in many Districts, although Boston, Cleveland, Minneapolis and Dallas reported mixed or flat activity. Retailers reported increased competition from online stores, and noted that consumers are shying away from in-store shopping.
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