Bloomberg reports Fed Says Almost All Districts Saw Modest to Moderate Growth.
MarketWatch reports Fed’s Beige Book finds muted reaction to Republican tax plan.
Only MarketWatch bothered to link to the actual Beige Book report.
The "book" is produced roughy two weeks before the FOMC meets to discuss interest rate policy. The next rate-setting meeting is January 31.
The book is largely a compilation of all the most recent Fed regional reports (Empire State, Philly Fed, Dallas Fed, etc.)
The regional reports, which come out monthly, consist largely of anecdotal diffusion indexes that have not matched actual industrial production numbers for years on end.
In short, there is little in the Beige Book that's of practical value. Here is the overall synopsis from the actual report.
Overall Economic Activity
- Reports from the 12 Federal Reserve Districts indicated that the economy continued to expand from late November through the end of the year, with 11 Districts reporting modest to moderate gains and Dallas recording a robust increase.
- The outlook for 2018 remains optimistic for a majority of contacts across the country. Most Districts reported that non-auto retail sales expanded since the last report and that auto sales were mixed. Some retailers highlighted that holiday sales were higher than expected. Residential real estate activity remained constrained across the country.
- Most Districts reported little growth in home sales due to limited housing inventory. Nonresidential activity continued to experience slight growth. Most manufacturers reported modest growth in overall business conditions. Reports indicated that some manufacturers increased capital expenditures over the reporting period. Most reporting Districts noted continued growth in transportation activity. Loan volumes in many Districts were steady. Among reporting Districts, agricultural conditions were mixed and energy contacts described a slight uptick in activity.
Employment and Wages Synopsis
- On balance, employment continued to grow at a modest pace since the previous report. Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth. Several Districts noted elevated demand for manufacturing and construction labor.
- Most Districts said that wages increased at a modest pace. A few Districts observed that firms were raising wages in a broader range of industries and positions since the previous report.
- Some Districts reported that firms expect wages to increase in the months ahead.
- Most Districts reported modest to moderate price growth since the last report; exceptions were Chicago, which noted that prices increased only slightly while San Francisco noted price inflation was down slightly.
- Reports of pricing pressures were mixed across the country although several Districts noted increases in manufacturing, construction, or transportation input costs. Firms in some Districts noted an ability to increase selling prices.
- Retailers in some Districts reported modest price increases and there were reports of rising home prices across most of the country. Agriculture and energy commodity prices were mixed.
How the Report is Produced
Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors, plus phone and in-person interviews with and online questionnaires completed by businesses, community contacts, economists, market experts, and other sources.
The Beige Book is 32 pages long. It does not merit a closer look.
Mike "Mish" Shedlock