Economy Shows Improvement, Fed ‘Beige Book’ Says

The U.S. economy showed signs of stabilization in late July and August, though trucking and transportation industry reports were mixed, the Federal Reserve said Wednesday.

All but one of the Fed’s 12 regional districts showed activity was stable or improving, the exception being the St. Louis region, in which activity appeared to be moderating, the Fed said in its latest “beige book” survey, which it issues eight times a year.

Overall transportation services demand was mixed, with reports indicating that freight volume declines were moderating in Cleveland, while Dallas and Atlanta reported a modest pickup in rail shipments.

Transportation contacts in the Kansas City region noted improved activity partly from an uptick in raw materials shipments, while Atlanta contacts said most regional trucking companies continued to experience weak freight demand, lower revenues and excess capacity.

Container trade volume rose in Dallas, although a year-over-year decline was forecast for the full year. Railroads reported a modest increase in shipments and a rise in contract prospects has improved company outlooks.

Chicago district contacts reported demand for heavy- and medium-duty trucks remained low, noting that excess capacity combined with looming emissions regulations was resulting in greater demand for used equipment.

The short-term outlook among manufacturers varied, but the majority of reports indicated that manufacturers were cautiously optimistic. Boston, New York, and Philadelphia reported that their contacts expect modest growth later this year or into early 2010.

The report, prepared by the Atlanta Fed, was based on information collected from July 21 through Aug. 31.