The Fed Beige book shows a mostly steady economy in 6 of 12 regional reports. “Steady” is in context of the the worst Beige Book in years.
Please consider the Fed Beige Book, a Summary of Commentary on Current Economic Conditions by 12 Federal Reserve Districts.
Overall Economic Activity
Overall Economic Activity On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Most Districts reported declining manufacturing activity. Activity in the banking sector was generally steady to up slightly, and loan demand was mixed, with some Districts noting an improvement in the outlook due to the decline in interest rates. Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives. Housing market activity has generally held up: inventory continued to expand in much of the nation, and home values largely held steady or rose slightly. Still, uncertainty about the path of mortgage rates kept some buyers on the sidelines, and the lack of affordable housing remained a persistent problem in many communities. Commercial real estate markets were generally flat, although data center and infrastructure projects boosted activity in a few Districts. The short-lived dockworkers strike caused only minor temporary disruptions. Hurricane damage impacted crops and prompted pauses in business activity and tourism in the Southeast. Agricultural activity was flat to down modestly, with some crop prices remaining unprofitably low. Energy activity was also unchanged or down modestly, and lower energy prices reportedly compressed producers’ margins. Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.
Last Month
On September 5, 2024, I noted Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts
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.
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
Chicago and Dallis improved both months. Minneapolis and Atlanta decreased both months.
Last month, I noted Fed Beige Book Conditions Are Worse Now Than the Start of the Great Recession
So, things are now “steady” but that is in context of the the worst Beige Book in years.
I expect a post-election shock to the downside. We will find out soon enough.
I expect post-election foot stomping, breath holding and whining from the right when Trump loses.
The swing states declined.
Renters will be heard in 2 weeks.
Let’s see Western Europe’s beige book. I’m hanging my hat on that rack. Sorry. It’s all I got.
Did a quick survey of the districts that report manufacturing and service surveys for the month of October. The prior months were mostly overall negative. The only survey that was positive was the Richmond Feds’ October service survey of revenue at +3 in October. The business services index of business conditions was -14.
The remaining districts that report monthly survey data were all negative for October. The prior months were overall negative as well. There may’ve been positive data that I missed on monthly basis but the 3 month moving average eyeball test were all negative overall.
Take the Beige Book and the survey data for what it is worth.
I agree with Keynes that the government should be counter cycilical but human nature is party till you drop. We fast in Lent to keep us from eating the seeds for the Spring planting. We are beyond eating the seeds of the next planting. Debt of our government is out of control. The debt has to be paid by either raising taxes or destroying the currency. With the current deficit at $2 trillion a year, then, obviously they will destroy the currency on the coming President’s watch, as neither candidate is in the club. The long bond auction today was a minor quake, or wakeup call.
*shrug* Capitalism goes through cycles. There are boom times and then there are downturns, sometimes recessions, sometimes stallouts, and on rare occasion even a full blown Depression. It always recovers.
The thing to remember about recovery is that it can be helped along tremendously by government. One of the lessons of the past hundred years (things were radically different in the Panics of the 1800s) is Keynesian economics works. You really can bury money in jars and pay people to dig them out of the ground. The problem is, Keynesian economics says you’re supposed to back off when the engine of capitalism is really roaring good. You save money during boom times, and counter-cyclically spend it during rough.
We’re in trouble with our debt because governments don’t make hay while the sun is shining and save up during booms. The Clinton administration was the closest one to come to a surplus, and look how long that lasted. No, if the elected government doesn’t wise up soon we’re all doomed. (You can read more of my writings by going to: dark-dot-sport-dot-blog … where -dot- represents a period.)
“One of the lessons of the past hundred years…is Keynesian economics works.”
You’re joking, right?
The point was we haven’t tried both sides of the system. Deficit spending is very popular during the recessions, but where are the surpluses during the booms? Spent. Oops.
During the dot com and housing booms the government should have raised taxes and cut spending to generate surpluses. Debt should have been retired in mass. The tops of the booms would be cut down so the irrational exuberance would never had happened.
Keynes’ economic philosophy worked from ’33 to ’42.
Since then his system has been bastardized by supply and demand side economists. MMT is the worst neo -Keynesian system advanced as was Ronald Reagan’s tax cuts and increased defense spending during high inflation while cutting some domestic programs.
Keynes argued for government intervention when the private sector couldn’t or wouldn’t invest and spend into the economy. He also advocated for a return to fiscal stability after the recession or depression ends, raise taxes and payback the debt that accumulated during the downturn.
Today, we’ve reached the point that Keynes’ fiscal stimulus measures won’t work because there is too much debt.
Keynesianism worked? Are you kidding? People were without adequate food and the government was slaughtering hogs and restricting food production. If you like poverty and war then FDR is your man.
I suggest you review GNP from ‘33 – ‘42.
Facts are troublesome when they don’t support your argument.
The economy rebounded sharply from the 1921 recession without government intervention.
You are comparing apples with oranges.
Keynesian economics facilitated world wars
We do not have Keynesian economics. We have Massive Monetary Theory. $1.9T deficit in time of modest growth is beyond comprehension.
You are absolutely correct. I once gave that lecture to the staff of the Colorado Governor and his Office of State Budget and Planning. “Make hay when the sun shines and put the excess into storage for the bad times. Go counter cyclical and you will be a hero.” Problem was their short attention span.
Attempted Keynesian economics has failed for the past century. We only bought the illusion of prosperity with all that wasteful government spending. What we actually got was just inflation. All prices 50-100x what they used to be.
Before Keynes gold was a mere $20/ounce, milk and gas were cents per gallon instead of dollars, and cars were $1000….
Much like Communism, Keynesianism “works” in theory, but fails in practice, because it fails to account properly for the realities of human nature.
To conflate communism with Keynes is off base.
During times of deflation and a Great Depression as occurred after ’29 and got progressively worst till ’34 to use your words, “fails to account properly for the realities of human nature.”
There are non-Keynesian ways to avoid deflation, and those were understood even in ’29 to ’34. The policy failures of the Great Depression – and those of the preceding bubble which set the stage – could’ve been avoided within a Federal balanced-budget context.
Keynes didn’t argue for abandonment of the gold standard. He did say it was a barbarous relic but that meant there were more effective means to conduct trade and policies than payment in gold. Had the conservative Churchill listened to him Great Britain wouldn’t have experienced as much as it did the effects of returning to the prewar peg of the sterling. Keynes was remarkably prescient to what did in fact occur.
Keynes main argument was that setting the price of gold to the prewar sterling metric didn’t account for the inflation that occurred after WW I.
To blame Keynes for wasteful government spending is akin to the late, great Flip Wilson comedy routine of The Devil Made Me Do It.
https://www.youtube.com/watch?v=_PJzBjinhV4
Swirling toilet bowl. Greed still getting pumped in markets. Musical chairs, tears, same as it ever was. On the political side, I just read that Nate Silver has indigestion.