Eight times a year, the Fed's Board of Governors publishes the Beige Book. The report provides a summary of the latest economic conditions collected by each of the 12 Federal Reserve Banks. Looking at the first sentence of each region's section allows a quick and easy way to gauge how the nation is doing. Below is a compilation of these opening sentences from the latest report:
Boston: Reports on recent business performance in the First District display considerable variation both across and within sectors, but point to slow economic growth overall.
New York: Economic growth in the Second District has continued at a moderate pace since the last report.
Philadelphia: Aggregate business activity in the Third District grew at a modest pace during this current Beige Book period, with few changes from the prior period.
Cleveland: The Fourth District's economy expanded at a modest pace during the past six weeks. New orders and production at District factories grew slowly.
Richmond: The Fifth District economy grew modestly since our last report. Manufacturing conditions improved on balance in recent weeks.
Atlanta: On balance, reports from Sixth District business contacts suggest that economic activity expanded modestly in June and early July.
Chicago: Growth in economic activity remained moderate in June and contacts maintained their optimistic outlook for the rest of the year.
St. Louis: Economic activity in the Eighth District has increased modestly since the previous report.
Minneapolis: The Ninth District economy grew moderately since the last report.
Kansas City: The Tenth District economy expanded modestly in late May and June, and most contacts anticipated stronger growth in the months ahead.
Dallas: The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing activity continued to increase, although there were a few reports of weaker demand.
As you can see, the nation's economy expanded overall. And just like the last report showed, the pace of economic expansion continued to increase moderately in the Southeast. Below are some highlights from the Atlanta Fed's section:
Employment and prices
Payrolls across the District continued to expand in June and early July, but at a slow pace. Wage growth remained in the 2-3 percent range, with the exception of some high-skill, low-supply fields. According to the Atlanta Fed's survey on business inflation expectations (BIE), firms' unit costs were up 1.9 percent on a year-over-year basis in June. (It's important to note that this figure was recently updated with new data. In the July BIE survey, firms' unit costs were up 1.8 percent year-over-year.)
Consumer spending and tourism
Since the last report, the consensus among District retailers was that sales growth picked up slightly, with several merchants indicating that customers spent more money per visit to their establishments than earlier in the year. District reports on tourism and business travel remained positive. Hospitality industry contacts expressed concerns that a rise in gas prices may adversely affect summer tourist activity.
Manufacturing and transportation
Manufacturers indicated that activity sustained the solid pace of growth noted in the previous report. New orders and production continued to increase, supplier delivery times slowed as demand for inputs rose, and commodity prices were elevated.
Real estate and construction
Fewer District brokers cited growth this period than in the previous report. Just over half of brokers indicated that home sales had increased from the year-earlier level, down from nearly two-thirds in June's report. On the other hand, reports from District builders remained fairly positive. Most contacts felt that recent activity either met or exceeded their plan for the period. The majority of builders indicated that construction and new home sales were ahead of the year-earlier level. Demand for commercial real estate continued to improve across most of the region. The outlook among District commercial real estate contacts remained positive, with most expecting activity to grow steadily through the summer months.
Banking and finance
Bankers continued to report increased competition and aggressive rates and loan structures. Contacts noted loan growth was strong over the last couple of months, with some of that growth coming from increased credit line usage. Banks continued to compete aggressively for quality borrowers, especially in small business lending. Mortgage demand in general was lower than last year.
Natural resources and agriculture
Gulf Coast refineries continued to run at near record levels, as they have for much of 2014. Refineries continued to invest in storage capacity to accommodate increased crude oil inventories flowing to the Gulf Coast from the Cushing, Oklahoma, hub.
While much of Tennessee, southwest Louisiana, and the southernmost tip of Florida continued to experience abnormally dry conditions, most of the District was not experiencing drought. Regional producers benefited from higher prices for many of their agricultural products, lower costs for feed and fertilizer, and a leveling off of fuel costs.
The Board will publish the next Beige Book on September 3.
By Sadat Karim, strategic information research analyst in the public affairs department of the Atlanta Fed