Let’s tune into the Fed’s Beige Book summary of economic activity in the twelve Federal reserve districts.
Summary below from The Beige Book Summary of Commentary on Current Economic Conditions.
Beige Book Overall Activity Key Points
- Seven Districts reported some level of increase in activity, five noted flat or declining activity—three more than in the prior reporting period.
- Wages continued to grow at a modest to moderate pace in most Districts, while prices were generally reported to have risen modestly.
- Household spending was little changed this period according to most District banks. Auto sales varied across Districts this cycle, but some Districts noted that sales were lower due in part to a cyberattack on dealerships and high interest rates.
- Most Districts saw soft demand for consumer and business loans. Reports on residential and commercial real estate markets varied, but most banks reported only slight changes, if any, in recent weeks. Travel and tourism grew steadily and was on par with seasonal expectations.
- Districts also reported widely disparate trends in manufacturing activity ranging from brisk downturn to moderate growth.
Boston: Economic activity rose modestly on balance. Prices increased slightly, and wage growth was slow amid stable employment levels. Residential real estate activity increased with improvements in supply, but commercial activity remained flat with increasing concerns for office leasing activity. The outlook remains cautiously optimistic, but contacts continue reporting elevated uncertainty.
New York: On balance, regional economic activity was little changed. Labor market conditions continued to moderate, with labor demand easing and the supply of workers increasing noticeably. Consumer spending was up slightly and remained solid. Though inventory increased, home sales activity remained restrained. Selling prices continued to increase at a modest pace.
Philadelphia: Business activity continued to grow slightly in the current Beige Book period. Nonmanufacturing activity lifted job growth to a modest pace; however, wage inflation remained modest. Firms reported modest increases in costs paid and prices received and noted increased competition in consumer-facing sectors. Expectations for future growth remained slightly positive overall—waxing for most firms, but waning for manufacturers.
Cleveland: District business activity declined slightly in recent weeks, and contacts expected flat activity in the months ahead. Consumer spending continued to decline modestly, and demand for manufactured goods softened. Employment levels remained flat. Overall, contacts indicated that wage and input cost growth remained moderate, and that selling prices grew modestly.
Richmond: The regional economy grew slightly this period, down from a modest pace of growth reported last cycle. Consumer spending on goods and food services was generally flat to up only slightly; however, spending on leisure travel increased moderately, particularly in coastal areas of our region. Employment grew slightly and wage growth continued to exceed price growth, putting downward pressure on margins for some businesses. Price growth remained moderate.
Atlanta: Economic activity was relatively flat. Labor markets stabilized; wage growth eased. Nonlabor inputs cost growth slowed, on net. Consumer demand remained flat. Business and group travel improved. Home sales were flat or slightly down. Transportation activity was mixed. Loan demand was flat. Energy activity was mixed. Agricultural conditions improved.
Chicago: Economic activity increased slightly. Employment was up modestly; business and consumer spending rose slightly; nonbusiness contacts saw little change in activity; and manufacturing and construction and real estate activity edged down. Prices were up modestly, wages rose moderately, and financial conditions loosened a bit. Prospects for 2024 farm income decreased slightly.
St. Louis: Economic activity across the Eighth District has continued to slightly increase since our previous report. Inflation pressures increased modestly, with slower price growth than in previous reports. Reports on consumer spending were mixed. District crop conditions remain stable with high rainfall mitigating excessive heat.
Minneapolis: District economic activity fell slightly. Employment grew but labor demand softened. Wage pressures remained moderate, and prices ticked up modestly. Consumer spending was flat but some segments remained healthy. Manufacturing fell and the outlook was negative. Commercial and residential construction improved slightly, and home sales were mixed. Agricultural conditions fell as farm income weakened.
Kansas City: The Tenth District economy expanded at a moderate pace. Hiring activity slowed as many businesses pulled back on new job postings, but employment levels were stable. Ongoing strength in labor markets supported modest growth in wages. Consumer spending grew at robust pace, driven by discretionary spending with particularly strong growth in travel-related consumption. Prices grew at a modest pace as pass-through of costs remained difficult.
Dallas: Economic activity rose slightly over the reporting period, buoyed by growth in nonfinancial services, finance, and energy sector activity. Housing demand and retail sales weakened in part due to elevated pricing and borrowing costs, while manufacturing output held steady. Employment increased, and wage growth was moderate, though pressures eased. Outlooks were less pessimistic overall.
San Francisco: Economic activity and employment levels were stable. Wages and prices grew slightly, while retail sales fell slightly. Activity was mixed in services, manufacturing, and commercial real estate sectors, but continued to slow in residential real estate. Conditions in agriculture weakened a bit. Financial sector conditions were little changed.
The Progression
- Modest to Slight or Flat (2)
- Slight to Flat or Decline (5)
- Flat to Decline (3)
- Already Declining (2)
This looks very recessionary because it is very recessionary. I think within 2-3 months a majority will be in decline.
Recession When?
I thought recession started in May or June and I have seen little to change my minds but perhaps I am a couple months early.
For discussion, please see Weak Data Says a Recession Has Already Started, Let’s Now Discuss When
Inflation is felt painfully in mostly red states which usually have laws that discourage unions, “right to work” states, which means wages would be in a race to the bottom, no bargaining power; so first workers get cheated by getting less pay as compared to the same jobs in states with better union laws, then, second they do not get as much raise (or nothing) as in the other states.
So when inflation went up, worker wages kept stagnant, so of course all workers (republican or democrats in those red states) and their families would be suffering and discontent, as employee wages did not keep up with inflation.
On the other side of the coin, States where worker unions are encouraged, usually blue states, in which workers have better bargaining power to get better wages, and where they did get better wages, so their wages went up higher than inflation, so they are Ok, more pleased than displeased.
The new hopeful JD proposes to up minimum wage as a carrot to workers, especially in the red states, it seems he wants to give crumbs. Workers want to have a better chance than minimum wage, they’d want to have better bargaining power than zero.
T. Wants to fire Union chief after he got much better wages for his union members. That’s what business wants. they just like to enslave workers to business bosses and to themselves.
As you see, the problem in the red states is of the making of the voters, for voting for majority of assembly’ representatives that discourage unions in their state,
That is what shows up in the polls, 68% of discontent “overwhelmingly from red right-to-work states”
Workers in red states fail to recognize the blue state advantages of reductions in personal freedoms, ever ratcheting up property taxes, growing government pension fund deficits, etc. etc. etc.
I grew up in NE Ohio. I saw firsthand the corrosive power of unions. NE Ohio is still a backwater, without right to work laws and a pervasive neo-Marxist mind set. No entity will invest in such a place.
what did union do in NE Ohio?
you got some links?
was trying to see why there is a discrepancy between facts on the ground of the economy blossoming and the bad feeling about inflation, I mean if your wages grew above inflation, then it should not be a problem; so it must be that people is red states are not getting enough wage growth to feel the pinch, hence the “right to work for less money”; or is it just the mostly republican bankrolled radio stations (paid for and bought by the Koch brothers) repeating this thing about groceries and gas often enough that stick to peoples mind, when they answer the polls?
The inflationary depression has become the new normal. Reinflation will applied sporadically to prop up ‘assets’ and delay the dread recession for the bloaters. Gov largess will feed and ’employ’ the poor until it doesn’t.
Mish, it might help you feel better if you were to say that the Econ Numbers — that they make up, “out of thin air” – -are confusing people about this recession….which should have been called out months ago.
Let’s face it, econ numbers are simply false and they tailor them to fit political narratives.
As long as they can Cherry Pick the numbers and the Majority Media helps them sell the “good news”, there is no need to make up the numbers.
If you count inflated nominal dollars the economy is growing a little. If you count widgets the economy is contracting rapidly.
The hyperinflation deflated : NVDA, AMD, ASML, TSM, AAPL, MSFT, TSLA, Googl…all deflated, losing trillions, fearing Trump and Biden. Though potatoes cost more. JD Vance and his wife are for startups and preventive medicine with a vegie diet. They will protect the second amendment, the supreme court and the forgotten people. Trump’s new apprentice is unknown. His piercing blue eyes and his speech made a good impression. His crazy mums scared him when he was a teenager. He ended with a dark note talking about his KT graveyard plot. Trump looked old. His
wife and daughter bailed out. Lara Trump is still in the game. She is a new superstar.
If you want higher real output, you drive the banks out of the savings business (which doesn’t reduce the size of the payment’s system). That’s exactly what C-19 did.
The 1966 Interest Rate Adjustment Act is prima facie evidence.
Nothing changed in 100 years. Everything is textbook. Banks still don’t loan deposits. Unless you understand that time deposits are derived from demand deposits you don’t understand money and central banking.
Jul 15
Short-term money flows, proxy for R-gDp, rose going into 2024. Long-term money flows, proxy for inflation have steadily decelerated and could become negative in the 4th qtr.
07/1/2023 ,,,,,, -0.03 ,,,,,. 0.12
08/1/2023 ,,,,,, -0.04 ,,,,,. 0.10
09/1/2023 ,,,,,, -0.05 ,,,,,. 0.09
10/1/2023 ,,,,,, -0.03 ,,,,,. 0.07
11/1/2023 ,,,,,, -0.02 ,,,,,. 0.06
12/1/2023 ,,,,,, -0.01 ,,,,,. 0.05
01/1/2024 ,,,,,, -0.01 ,,,,,. 0.04
02/1/2024 ,,,,,, -0.01 ,,,,,. 0.04
03/1/2024 ,,,,,, 0.02 ,,,,,. 0.04
04/1/2024 ,,,,,, 0.05 ,,,,,. 0.06
05/1/2024 ,,,,,, 0.05 ,,,,,. 0.04
06/1/2024 ,,,,,, 0.06 ,,,,,. 0.04
07/1/2024 ,,,,,, 0.05 ,,,,,. 0.03
08/1/2024 ,,,,,, 0.05 ,,,,,. -0.01
09/1/2024 ,,,,,, 0.03 ,,,,,. 0.00
10/1/2024 ,,,,,, 0.04 ,,,,,. 0.01
11/1/2024 ,,,,,, 0.05 ,,,,,. 0.01
12/1/2024 ,,,,,, 0.02 ,,,,,. 0.01
I.e., no recession, but a decline in N-gDp. I.e., direction is important not absolute value.
JP first attempt to eradicate negative rates from the world failed in Xmas 2018. His second attempt was more successful. All rates, including those in Japan, are above zero. Gravity with Germany and Japan pulled them together. It prevents US10Y from rising above 3M and 2Y. All rates in the US yield curve are above the inflation rate M/M % change. It’s down from 9.1% to 3%. Yet, the 3% is a fake positively biased rate. The real inflation is lower. The Fed needs a stopping action, but JP can’t bc he cannot intervene in the Nov election. DIA made a new all time high. UNH, GS, BRK/B and the regional banks took off like a rocket.
1M DIA uptrend line : Oct 2023 low to Apr 2024 close. If DIA cont to close < this line we are toasted.
The real inflation rate is not lower its higher. The economic politburo deliberately understates the real life inflation rate.
Yes, yes they did, and will continue to do so. This is simply entertainment, like the Lies politicians have learned to tell, duly reported by a compliant press.
CFNAI-MA3 shows return to the trend line between 2010 and 2019. No recession. The Fed erred in not raising rates quickly enough in 2021 or by early ’22. That mistake likely costs Biden the White House because they let the economy run too hot for too long.
https://www.chicagofed.org/research/data/cfnai/current-data
All bets are off after November. A hotter economy due to Republican deregulation likely forces the Fed to increase rates come 2025. The next President really is going to have their hands tied by debt, interest rates and inflation.
If the deficit spending were to stop there would be instant depression. So just keep printing as a ponzi scheme cannot taper. When the wholesale rejection of the US dollar comes its game over. The hegemonic US will not go quietly. The fourth turning is in full play. Short the dollar… buy tangible property
Good advice I totally agree with your assessment
Whatever they say about adjusted numbers, much of the Rose Colored Glasses the economy is viewed through is Nominal. Mish called a much earlier recession, and I called one as early as 2nd quarter 2022. Nominal statistics washed all over this and even though the markets, GDP and employment said otherwise. If the economy was only adjusted upward by more part time jobs, and under reported costs than CPI portends, many regions of the country were already in recession much earlier than now. Standard of living has definitely been recessionary for many economic demographics, and if not broad regions, definitely many towns and cities. Inflation has the ability to mask recessions with numbers.
Beige book … pile of qualitative pablum. Crops/arg have 5 mentions … is this 1920?
Since I’m early on the comments I’ll say good post on Mish-Bucks with links to Greenspans “return to gold” (spelling out the significant challenges).
So, as Ron Paul says, yes, let’s end the Fed. Then, who creates/controls money?
Let’s agree Fed is too powerful/political … can we use statutorily autopilot using Taylor or K-percent Rule?
Let’s not forget, the Fed is OVER ONE TRILLION in losses hold due to rising rates (just like banks holding bonds). Taxpayers on the hook … dang-nab-it.
https://www.federalreserve.gov/aboutthefed/files/combinedfinstmt2022.pdf
Project 2025 Fed plans:
https://static.project2025.org/2025_MandateForLeadership_CHAPTER-24.pdf
Oh yea, and watch out for sloped roofs. 🙂
Project 2025 should be fun.
when the actual recession is only capable of being officially identified by the people who make up the criteria, it seems highly unlikely we’ll ever see an “official recession” ever again.
Its like if you had a pandemic, and a Doctor in the USA funded a lab in china to create it, then the Doctor made a lot of money telling everyone to get a mystery injection, that they had to officially revise the definition of “Vaccine” in order to call it a “Vaccine”. Then the Doctor told everybody it was highly effective except it wasn’t really.
You’ll never find that Doctor admitting the virus was created in a Wuhan lab, and you’ll never see the FED or the banks declaring an official recession, no matter how many people are living under bridges or in their cars. No matter even when the official exchange rate is measured in stolen catalytic converters, there is never a real recession.
Welcome to doublespeak where war is peace and recession is prosperity for all.
Stolen converters, broken window fallacy … all growth! Bring it on! 🙂
I caught Ben Bernanke trying to steal my catalytic converter last night, he said it was the Fed’s new growth program. Cash for clunkers meets No Catalytic Converter Left Behind.
To the moon Alice, to the moon. Dow one million by 2030!!!
a great buying opportunity!!!! Cramer says buy Catalytic Inc, and Robot Welders Unlimited, Unlimited growth ahead. Also shorting platinum…