2011 Economic Calendar
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Beige Book  
Released On 4/13/2011 2:00:00 PM For Mar, 2011

The latest Beige Book shows the economy continuing to improve. Leading the economy is manufacturing with consumers also contributing. Labor markets are gradually improving. However, higher commodity costs are putting upward pressure on prices. Wage inflation remains subdued.

"Reports from the twelve Federal Reserve Districts indicated that economic activity generally continued to improve since the last report. While many Districts described the improvements as only moderate, most Districts stated that gains were widespread across sectors, and Kansas City described its economic gains as solid. Manufacturing continued to lead, with virtually every District citing examples of steady improvement, often with reports of increased hiring. Retailers in the Boston District reported mixed sales results and retail sales remained weak in the Richmond District, but all other Districts experienced at least slight gains in consumer spending and the New York District cited robust sales. Business services, including freight-related activities, improved in most Districts. Loan demand was either unchanged or up slightly in most Districts, with New York, St. Louis, and Kansas City citing weaker lending. Residential and commercial real estate performance varied across Districts. Seven of the Districts described commercial real estate as slightly improved, while five noted that their markets were flat. While most Districts noted little change in their residential real estate markets, half of the Districts cited at least pockets of weakening.

"Reports focusing on the near-term outlook were most often upbeat. Some Districts, however, also noted that uncertainties remained high. Boston, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, and Dallas all noted actual or expected disruptions to sales and production as a result of the tragedy in Japan. Most Districts reported signs of improvement in at least some of their labor markets and Boston, Richmond, Chicago, and Kansas City cited examples of concern among their contacts about being able to obtain certain types of skilled workers. Some businesses in the Philadelphia and Cleveland Districts still preferred to hire temporary over permanent workers.

Manufacturing is clearly the strongest sector of the economy with all twelve Fed Districts reporting increased manufacturing activity since the last report.

Real estate and construction are still lagging. Real estate markets for single family homes generally were little changed from low levels or continued to weaken across all Districts. Commercial real estate activity remained weak in all Districts

The employment picture is slowly improving.

"Most Districts reported that labor market conditions were generally stronger than in their last reports. New York, Richmond, Chicago, Minneapolis, Kansas City, and Dallas all noted increased employment activity, while Boston and Atlanta reported modest or gradual improvement. However, Philadelphia, Cleveland and San Francisco mentioned limited or delayed hiring, while labor market conditions were mixed in the St. Louis District."

For the most part inflation is at the commodity levels although price pressures are rising.

"Wage pressures were described by most Districts as weak or subdued, but higher commodity costs were widely reported to be putting increasing pressures on prices. Energy prices were cited most often, but raw materials in general were an increasing concern of businesses. The ability to pass through cost increases varied across Districts, with manufacturers generally finding less resistance to price increases than either retail or construction (where weak demand was a limiting factor)."

Price pressures are highest at the production and distribution levels.

"Input prices rose in most Districts, particularly for cotton and other agricultural commodities, petroleum-based products, and industrial metals. In addition, shippers added fuel surcharges in several Districts. Boston, Cleveland and Atlanta cited increasing cost pressures, and some manufacturers in Boston were raising their selling price to pass costs along to customers."

Overall, the latest Beige Book shows the recovery continuing. There is ammunition for both the hawks and doves to continue to plead their cases at the April 26-27 FOMC. The economy is growing but has weak spots. There is still slack in labor markets but commodity prices are boosting inflation pressures. The policy debate is getting more interesting.

This book is produced roughly two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Fed district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts.  Why Investors Care

2011 Release Schedule
Released On: 1/123/24/136/87/279/710/1911/30
Release For: DecFebMarMayJunAugSepOct

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