Let’s compare current Beige Book conditions to those at the beginning of the Great Recession.
Beige Book January 2008
Let’s take a look at the Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in January of 2008. The Great Recession had begun.
Reports from the twelve Federal Reserve Districts suggest that economic activity increased modestly during the survey period of mid-November through December, but at a slower pace compared with the previous survey period. Among Districts, seven reported a slight increase in activity, two reported mixed conditions, and activity in three Districts was described as slowing.
Beige Book March 2008
Next consider Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in March of 2008. The Great Recession was underway.
Reports from the twelve Federal Reserve Districts suggest that economic growth has slowed since the beginning of the year. Two-thirds of the Districts cited softening or weakening in the pace of business activity, while the others referred to subdued, slow, or modest growth. Retail activity in most Districts was reported to be weak or softening, although tourism generally continued to expand. Services industries in many Districts, including staffing services in Boston, port activity in New York, and truck freight volume in Cleveland, appeared to be slowing, but activity in services provided some positive news in Richmond and Dallas. Manufacturing was said to be sluggish or to have slowed in about half the Districts, while several others indicated manufacturing results were mixed or trends were steady.
Beige Book July 2008
Next consider Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in July of 2008. The Great Recession was in the seventh month.
Reports from the twelve Federal Reserve Districts suggest that the pace of economic activity slowed somewhat since the last report. Five eastern Districts noted a weakening or softening in their overall economies, while Chicago characterized its economy as sluggish and Kansas City noted a moderation in growth. St. Louis said activity was stable and San Francisco reported little or no growth. Cleveland and Minneapolis reported slight increases in economic activity, while Dallas described growth as steady and moderate.
Beige Book Most Downbeat in Ages
September 2024 Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts
On September 5, 2024, I noted Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts
Overall Activity
- Economic activity grew slightly in three Districts, while the number of Districts that reported flat or declining activity rose from five in the prior period to nine in the current period.
- Employment levels were steady overall, though there were isolated reports that firms filled only necessary positions, reduced hours and shifts, or lowered overall employment levels through attrition. Still, reports of layoffs remained rare.
- On balance, wage growth was modest, while increases in nonlabor input costs and selling prices ranged from slight to moderate.
- Consumer spending ticked down in most Districts, having generally held steady during the prior reporting period.
By District
- Increased Modestly: Boston and Dallas
- Increased Slightly: Chicago
- Flat, Unchanged, Stable: New York, Kansas City, San Francisco, St. Louis
- Decline Slightly: Philadelphia, Atlanta, Minneapolis, Cleveland, Richmond
Strongly Push for 50 Basis Points
That is how I see it too. But the market disagrees. We will have a better idea on Wednesday.
September 2024 vs July 2008
- Increasing Sep 2024: (3) Boston, Dallas, and Chicago
- Increasing July 2008: (4) Kansas City, Cleveland, Minneapolis, and Dallas
- Flat Stable Sep 2024: (4) New York, Kansas City, San Francisco, St. Louis
- Flat Stable July 2008: (3) Chicago, San Francisco, St. Louis
- Decline Slightly Sep 2024: (5) Philadelphia, Atlanta, Minneapolis, Cleveland, Richmond
- Weakening July 2008: (5) New York, Philadelphia, Atlanta, Richmond, Boston
Small Businesses Reducing Workers for the Last Four Months
On Thursday, I noted Small Businesses Reducing Workers for the Last Four Months
ADP data shows small businesses with 1-49 workers have been reducing workers for four months. Those with 20-49 workers have shed workers for 7 straight months.
Hmmm. That must be nothing .
On September 3, I noted Construction Spending Growth Slows in May, Stops in June, Negative in July
Again, that’s nothing.
BLS Negative Job Revisions 15 of Last 21 Months
Also note BLS Negative Job Revisions 15 of Last 21 Months
And the current economic headline conditions are worse than the conditions heading into the 7th month of the Great Recession.
Well, I’m sure that’s nothing too.
It’s natural, healthy, and normal for growth to periodically slow, unemployment to rise, people to cut spending. It seems senseless and foolish to try artificially stimulate the economy with deficit spending, massive debt, interest rate suppression, money printing, all which contribute to malinvestment, greater wealth disparity, inflation/debasement, asset bubbles. All those manipulations of the free market are actually the real problem, not the solution. Conditions could instantly begin to change for the better if we enacted big spending cuts and got the govt out of interest rate suppression and subsidizing mortgages and our country could become much more stable and prosperous. Let’s support candidates that are committed to getting us back on track, and sorry to say, that’s not the policy current two (or one) big parties of the federal reserve.
Are things worse now? Yup
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. Read More
The Government is afraid to call a recession this close to the election. Maybe they should leak some internal e-mails.
THE SKY IS FALLING! WE’RE ALL GOING TO DIE!! HIDE!!!
Correct. But there is nowhere to hide.
https://fasteddynz.substack.com/p/the-ultimate-extinction-plan-uep
Congrats, Mish! I’m proud of you for making it through an entire post without saying we’re currently in a recession. Your beige book comparison is probably correct. And I do agree that conditions are starting to deteriorate. My only qualm is that all of this deficit spending is prolonging the amount of time that passes before we actually get to a NBER declared recession.
Conversely, I am concerned that we’ve been in a soft landing for 12 months now and after the economy deteriorates more through early next year, we may not find ourselves in a real / declared recession. As such, we may have this double dip like in the mid 70’s where inflation retreated and then came back with the real recession lying on the other side of all this.
To be clear, I do feel like there’s a sizeable portion of the population who would say that it feels like they’ve been in a recession for at least 4-5 months now.
Cheers!
“NBER declared recession.” After the election.
What do you call it when the entire economy exists only because of trillions of dollars of new debt every year… without which… there would be no economy.
I call it desperation …. and temporary. The period before the economy implodes.
https://wolfstreet.com/wp-content/uploads/2023/06/US-Gross-National-Debt-2023-06-17.png
Torsten Sløk: This Is a Soft LandingWhy You Should Read: Apollo’s Torsten Sløk made a stir a few months by predicting no rate cuts this year. The Fed may soon prove him wrong on that, but he continues to argue the economy is neither in or near recession. This chart collection is his latest evidence.
Key Points:
Bottom Line: The popular narratives are mostly either/or, insisting on either inflationary boom or recessionary bust. Yet “milder but still positive” growth is also possible, and maybe likely.
-Patrick Watson
https://ci3.googleusercontent.com/meips/ADKq_NZz3sEVjHNupivO6kmEAdpksw1fqbE7-zzb0cuRDzuzRcaH_cPARcE63BOQjpJSi1Q9qYPZJW-Eow-4CircLjMoTW5TgCAm-C5gIRb4TzYEwKlKP-P-jy8cotTE=s0-d-e1-ft#https://s3.amazonaws.com/ggc-mauldin-images/over-shoulder/icon-pdf.pngDownload PDF
copied from john Mauldings newsletter
Does even a single one of those data series have a track record of turning in real-time and noticing a recession?
I’m quite certain that the Fed’s models do not. I’m fairly confident that bankruptcy filings only rise later in a recession, not at the start.
Does anyone even use debit cards anymore? It’s credit cards that would be the tell.
And as for wage growth, how is that measured, does it account for the lack of wages by the rising number of unemployed? When businesses let go of some of their workforce, there may well be more pay going to the survivors at first. What matters are aggregate hours, part-time vs. full-time jobs and so on. Many of those other metrics have 70-year track records of predicting recession and have turned down already, some for months.
I believe they do. You can tell this when you are standing in a checkout line and you people have to enter a 4 digit code after the insert/tap/scan the card they are using. There seems to be an awful lot who do this, even for large purchases at the grocery.
Then there are the people who look like they are scanning a credit card but it is really an EBT (Food stamp) card. This will often show on the monitor if you look.
And if you go to the stores in the lower income areas out here, actual cash is what most seem to use, likely because many work under the table for cash.
Is that because it’s actually worse, or is it because we have a much greater access to the actual numbers (truth) now?
Think about one’s reality. What was presented 15+ Years ago, was not even close to what we have today for information.
Gullible is afforded with limited access to information, and a continual messaging of that information as the Truth. We now have unlimited access to the truth, and powerful voices not going along to get along, but speaking their minds, based on the truth. JS…
There’s more propaganda now, and more dirty laundry being aired, but in terms of basic facts and people’s willingness to face reality, 2005-2009 had 2023-2024 beat hands-down. Then as now, there was plenty of hard data available for those who cared to look.
A larger proportion of people today have submerged themselves in their preferred propaganda. More “information” but less “reality”.
It’s like some people – across the full range of possible perspectives – have chosen to play their life out as a fantasy video game rather than accept that other perspectives might be valid too.
What is your opposing perspective?
I’m saying that there isn’t really greater “factual information” access today than 15 years ago. And that what people are being fed today as “information” is mostly propaganda, not truth. And that a much larger proportion of the population is choosing to live in the propaganda-worlds rather than find the truth. The truth is still out there, but amidst more chaff there’s less willingness to find what’s real.
The more knowledge available at one’s finger tips, the greater the ignorance. Astonishing really.
The free market should be setting interest rates, not the monetary politburo. How were they set beffore the ivory tower wizards thought they knew everything? Rates should be a couple of percent higher that true inflation, not the fake numbers the bureau of lies and statistics publishes.
Agree 100%.
By ivory towers, you mean those who:
Went to the right university, then hoped on the corporate ladder, revolving door between government positions.
Spent entire life at universities, ending by tenured professorship.
Degrees in eCONomics or law.
As little life experiences as possible.
Luis XVI had better ministers.
“Luis XVI had better ministers.”
Ditto current day Putin.
While Xi has ministers orders of magnitude better.
As did Olof Palme.
And does the current Afghan Taliban.
And: None of that will change after not just this “election”, but indeed also not after any future election until someone at least as “radical” as Ron Paul finally wins. Or, until either Xi or the Taliban saves us by sacking the manureshow.
Bruh, you need to relocate to China and or Afghanistan then give us Instagram footage of how great you are having it compared to us dumbphuckistanians.
(I know you were just joking in your post)
Maduro almost inevitably has it greater in Venezuela than he would pretty much anywhere else……
OTOH: Among newborns picked at random: The ones born in China, almost invariably have a brighter future ahead of them than the ones born in Venezuela or the US. By now, that’s true even in absolute terms. Relative to where their country was when they was born, the difference will be much starker than that. And that’s the only metric which is even remotely defensible, for assessing the relative merits of CURRENT governments: Nobody doubts Jefferson was a less destructive head of state than Mao. Such that, by 1971, America was orders of magnitude preferable to China as a place to be born. But in just 2 generations since then, ALL of that advantage has been stolen and handed to Fed Welfare Queensand other useless leeches without any value at all. who has then summarily wasted ALL of that advantage. Such that “we” are now flat out behind.
And that’s vis-a-vis communists. Not at all against some form of Galt’s Gulch economic allstars government… Literally: In 1971, America was 100 times China. Since then, that bunch of communists have literally beaten the financialized version of “us” 100 to nothing. 2/3rds of that due to China improving. And the other third from America literally being much, much poorer, even in absolute terms, than “we” were 50 years ago. That’s literally Argentina grade disastrous performance: From top of the world to just a sad joke, in two generations. It’s certainly worse than even such standard bearers of incompetence and wealth destruction as the Soviets managed, from 1920 to 1990.
And that’s what matters. Not whether the same applies to Maduro nor Biden nor Buffet nor PapaDave nor me personally, nor for that matter the majority of Mish’ readers
Wrt. Afghanistan, while it’s a poor place and those born there may not be the ones most likely to be born the wealthiest; they do have the greatest probability of being born into the most liberty. It is one of the few places where government is still somewhat limited. Enough so, that the central government hold hardly any sway at all, beyond central Kabul. Instead being fully dependent on not offending their citizenry too badly, lest the properly armed citizens decide to turn on them…. And; Liberty being the highest political goal and all…..
Maybe explain why ‘Rates should be a couple of percent higher than true inflation’ ??
It isn’t that rates need to be set at any specific level. Simply a free capital market will tend toward a level that represents the true opportunity cost.There’s no need for artificial adjustments of QE and QT, and presuming inherent risks are irrelevant.
Government with less control is preferable to government with total control.
Why would anyone risk lending money without any profit. The rate obviously would vary depending on risk.
And where does this currently happen ANYWHERE in the world?
Exactly nowhere and that IS the problem
Yes, and you showed one of the big themes, terms in Scripture; the world, or worldly, about humans pursuit of and preoccupation with temporary, material things instead of humbling oneself and giving and forgiving, Gods way of earning things much better and everlasting in the hereafter.
“Beige Book Most Downbeat in Ages”
Does this mean green shoots are just around the corner? Asking for somebodies friend, twice removed.
My third cousin wants to know, too.
Third cousin fourth removed asked for this information also…
Oh let me think, when have I seen weeds growing over a subdivision before?
Why by golly during a recession.
When money gets tight, the cutbacks start. Typically for businesses, much like homes, it starts with reductions. In this case mow and treat half as often for example.
It always comes down to the little things. When they are there, nobody really recognizes them. When they go missing, they are missed very quickly, and mentioned sooner rather than later. Ironically it’s what they were intended to do, but the intentions are quietly admired, and quickly vocalized when no longer around…
Ha! In 2007, I flew into Las Vegas (not to gamble). For mile after mile on approach, the excess subdivisions (roads and footpaths) were covered with sand.
Back in 1970’s when I was a Framing contractor things were fairly dicey as is now. When sales were slow the Builder at that time would have the excavator run around the site and stir up the surface so that the jobsite looked active.
Nothing harder to sell then a project which appears inactive.
Weeds everywhere means no sales activity or interest. Developer not willing to spend even a days pay for a small dozer to clean things up.
This is in an affluent area so my read is the weakness is spreading uptown.
Or when developers were trying to squeeze a project into production with financials that maybe, sometimes, on rainy Tuesdays, just barely made sense. Lot’s of that here in the SF Bay Area, which is why some projects are not moving forward.
As I have mentioned before, not building Housing is a sure fire way of creating a Housing shortage. Much like the Farmer who plants in the spring not knowing if there would be enough Rain for crops to grow.
Housing is a Crap shoot. Fed intervention in credit markets using Housing as a stimulus method or way of restricting economic outcome, only compounds the Risk of going Bust..
I have four boys, not one of them would I train to build a House, except for themself.
Jojo have you checked out those upscale refrigerator boxes. Really cool in summer and winter.
I live east of NYC. Subdivision that was started in spring cutting road and putting in curbs, decided to make a drive by to see how it was progressing this weekend.
Now has weeds growing over the parcel with zero progress on road. Guess that shows up as the Flat Stable Sep. 2024 part of Beige book analysis which includes NY
As to article Small Businesses Reducing Workers for Past Four Months. How can this be as Harris just stated she will set goal of creating 25 million new small Businesses by end of first term. Such a small business friendly candidate like Harris surely must be inspirational for all those drooling at the Bit waiting to go at it.
Maybe all those small business owners put out of Business by lock downs are just not seeing things properly?
am sorry must be me cherry picking.
Somehow I really just do not miss the Housing Building Business.
Kamala has zero understanding of the economic base. The last thing the US needs is more ‘small businesses.’ It needs ‘innovation businesses’, particularly those with global markets.’
I’ve posted my prediction before. T-Rump wins in a record landslide, the economy falls off a cliff Ala GFC, lame duck T’Rump spends four years blaming demorats controlled house, senate, ushers in 8 years of AOC presidency.
🤣 LMAO
Cherry picking. Go through history and look at all the other beige books.
You do it – Report back
Good going comrade Lawrence!
They told me that everything’s coming up roses and to BTFD … Plus ca change, plus c’est la meme chose. Rotation into more defensives like WMT is interesting, but the AI bust will be a roach motel.
I’ll buy A-EYE when one remote controls my TV, sound bar, and streaming service of choice. You say you have it now?
Great!
Post the information on how to here.
Then let’s rename A-Eye to superior intelligence ”
Yikes@
The darkest area is W.PA, OH and W. VA. Our national industries are built in this area. This map helps Trump/Nance. If elected Trump will tell judge Julio Merchan : come and get me in Mar Largo.
Not West Virginia Look again it’s eastern Kentucky
The increases in spending from Chicago has to deal with my car repairs which have totalled $10,000 in the last few months. Sorry.
That’s an EV, right? Or did you buy a Mercedes or BMW?