Thursday, December 2, 2010

Fed Beige Book:"USA Economy Continued to Improve" (Review) "Hiring activity showed some improvement"

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Marriner S. Eccles Federal Reserve Board Building in Washington


Fed Beige Book: USA Economic Activity Continued to Rise at Modest Pace

Summary
The Federal Reserve Board issued the much scrutinized Beige Book on December 1, 2010. Overall, "Reports from the twelve Federal Reserve Districts indicate that the economy continued to improve, on balance, during the reporting period from early/mid-October to mid-November." The Federal Reserve wording and theme is more positive regarding economic activity, recovery, and growth than in previous reports. No districts reported overall negative, slow, or held steady economic activity: 10 districts reported expansion and growth of economic activity and conditions and 2 districts reported varied or mixed activity. As always, the Fed Beige Book, officially titled the Summary of Commentary on Current Economic Conditions by Federal Reserve District, is carefully worded. 

Regarding the USA Financial System
"Lending activity remained stable across most Districts. Credit quality has been steady to improving for most of the Districts that commented on it."

Regarding Jobs Nationwide
"Hiring activity showed some improvement across most Districts."

Economic Conditions Nationwide by Category Since the Prior September 8, 2010 Report:
Consumer Spending: reports on consumer spending tended to be positive. 
Travel and Tourism: tourism improved in all reporting Districts
Business Spending (no mention)
Professional and Nonfinancial Services steady to increasing activity
Manufacturing activity continued to expand in almost all Districts
Transportation activity (no mention)
Residential Real Estate: housing markets remain depressed
Commercial Real Estate: conditions mixed, and activity stayed at low levels
Real Estate Construction activity remained at a low level in all Districts
Banking and Finance: lending activity remained stable
Agriculture conditions were generally favorable
Natural Resources: overall activity in the energy sector continued to expand
Employment: hiring activity showed some improvement across most Districts
Wages: wage pressures were contained
Prices: prices for final goods and services were fairly stable

Economic Activity and Conditions By Federal Reserve District
(Prior report was October 20, 2010, from information collected on or before November 19, 2010)
Boston: business activity continues to expand gradually
New Yorkeconomy has continued to expand
Philadelphia: business activity has been varied across sectors
Cleveland: economic activity grew at a modest pace
Richmondeconomic activity increased at least moderately in most sectors
Atlantaeconomic activity rose modestly
ChicagoEconomic activity increased at a slightly faster pace
St. Louis: reports have been mixed
Minneapoliseconomy grew at a firm pace
Kansas City: economy strengthened
Dallaseconomy expanded at a modest pace
San Francisco: economic activity continued to edge up

Conclusion
This December 1 Beige Book, by district economic activity, is more positive than the September 8 and October 20 reports. No districts reported negative, slow or held steady economic activity, compared to 2 and 5 in the previous reports, respectively. 2 districts reported varied or mixed activity (Philadelphia and St. Louis), compared to 3 in the prior report. The other 10 districts reported expansion and growth of economic activity and conditions. The wording is more optimistic than previous reports.




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