Eight times a year, the Federal Reserve puts together a report known as the Beige Book. Each of the 12 Reserve Banks gathers anecdotal information through reports from Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources and summarizes its findings to create its Beige Book. The report is then released to the public approximately two weeks prior to each Federal Open Market Committee meeting.
The Atlanta Fed wrote the following summary of economic conditions for its most recent Beige Book, which was released on March 2, 2011.
"According to reports from Sixth District business contacts, economic conditions continued to improve at a modest pace in January and early February. Most retailers contacted stated that adverse weather had affected the positive sales trend seen at the end of last year. The hospitality industry experienced moderate growth as hotel occupancy and bookings increased, most notably in Florida. Weakness persisted throughout the District in both residential and commercial real estate. Manufacturers cited growth in new orders along with plans to increase production in the near term. Transportation firms remarked that freight shipments remained stable. Credit conditions improved for segments not related to residential construction and real estate. Labor markets continued to recover at a slow rate, with most businesses maintaining a preference for hiring temporary rather than permanent employees. Some businesses indicated limited plans to pass costs through to consumers in an effort to increase their margins from unusually low levels, recognizing that they may have to reverse course if there is significant buyer push-back."
Part of the way the Atlanta Fed gathers anecdotal information is through surveys. Our surveys are conducted monthly and use our Regional Economic Information Network (REIN), composed of business contacts who gather firsthand information about trends and developments in the economy. A few examples of how some of that anecdotal information makes it into our Beige Book can be seen in the opening summary above. For instance, when we mention that "retailers contacted stated that adverse weather had affected the positive sales trend seen at the end of last year," we are basing this observation on our analysis of our recent retail survey results. When we report that "manufacturers cited growth in new orders along with plans to increase production in the near term," this information comes from of our analysis of the most recent purchasing managers' index report from our friends at Kennesaw State University.
The regional executives in each of our branches (including the Atlanta Fed) have established relationships with leading businesspeople and community groups from all sectors of the economy for REIN. It is these contacts who, either through meetings or surveys, provide us with much of the content we need to construct our Beige Book.
By Shalini Patel
a senior economic analyst in the research department