Beige Book paints less-than-rosy picture of recovery

By Reuters
Posted July 28, 2010 at 1:24 p.m.

Overall U.S. economic activity is still increasing but not robustly and in a few districts has lost steam over the past several weeks, the Federal Reserve said  Wednesday.

The Fed’s latest Beige Book summary of national economic conditions, based on information before July 19, pointed to a less-than-booming recovery with sluggish housing markets and sales of costly items like new cars weakening.
“Among those districts reporting improvements in economic activity, a number of them noted that the increases were modest, and two districts, Atlanta and Chicago, said the pace of economic activity had slowed recently,” the Fed said.

The Beige Book reports on conditions in all 12 districts of the Federal Reserve system and carries a high degree of credibility because it is based on interviews and anecdotal information from coast to coast.

The latest report, compiled by the St. Louis Fed Bank, covers roughly seven weeks from the previous Beige Book in early June.

While manufacturing continued to expand in some districts, activity had slowed or leveled off in New York, Cleveland, Kansas City, Chicago, Atlanta and Richmond.

Retail sales — a gauge of consumers’ economic participation — were generally higher but modestly.

“Several districts cited apparel, food and other necessities as recent strong seller, while big-ticket items were weak sellers,” the Fed said.

Most districts said new-car sales have declined, and housing was sagging.

“Activity in residential real estate markets was sluggish in most districts after the expiration of the April 30 deadline for the homebuyer tax credit,” the Fed said, referring to an $8,000 credit offered to encourage first-time home buyers.

There was a modest improvement in labor markets, with several reports of temporary hiring. Consumer prices held steady in most parts of the country while wage pressures were described as “contained.”

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One comment:

  1. tom0942 July 28, 2010 at 2:49 pm

    Folks, this is what happens when you send a bunch of community organizers to Washington. How can the economy recover with the series of job-killing schemes these economic illiterates have in store for us – cap and trade, higher taxes, and healthcare reform. These folks never met a tax increase for you and me they didn’t like.