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Highlights
The latest Beige Book confirms recent trends in economic indicators. Economic activity "generally expanded modestly" since the last Beige Book. The pace of activity somewhat varied by sector. Consumer spending was generally reported to be flat to up slightly. Sales of new vehicles were steady to stronger and running ahead of comparable 2011 levels.
A highlight was reports that residential real estate conditions have improved. Prices are steady or increasing by District. Existing home sales generally are up with home supply dipping in a number of Districts. However, commercial real estate markets were mixed since the last report.
Conditions in the manufacturing sector were mixed but, on balance, somewhat improved. Significant gains in manufacturing related to the construction, energy, and transportation sectors were reported across several Districts, with particularly robust gains tied to the automotive industry.
Overall loan demand was steady to stronger in most Districts. Credit standards were little changed since the last report, and a number of Districts noted improvements in loan quality or steady to declining delinquency rates.
Employment conditions were little changed since the last report. As for some time, there were reports of shortages of highly skilled workers, but otherwise wage pressures remained modest. Beige Book contacts indicated that demand for labor was stagnant due to uncertainty related to the upcoming presidential election, U.S. fiscal policy, and European debt issues cited by some as restraining hiring.
Overall, the latest Beige Book paints the same picture as recent economic news. The positive is that two of three key worries by businesses will likely be resolved somewhat soon. The presidential election will be over and Congress must deal with the fiscal cliff issue. U.S. policies will be clarified soon. Europe will take longer.
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