Economy Still Soft, Fed's Beige Book Says
The Commentary, better known as the Beige Book for its beige cover, was released Wednesday.
"Economic activity generally remained soft in October and the first half of November, with evidence of additional slowing in most regions outweighing signs of recovery in a few districts," the central bank said in its summary.
The Fed said that manufacturing activity continued to get weaker, evidenced by “widely reported” lower production, fewer new orders and higher unemployment.
“More than two-thirds of the districts reported that new orders and production decreased or grew more slowly,” the Fed said.
The Federal Reserve Bank of Chicago reported that heavy equipment manufacturing levels, especially those trucks, were down during the survey period.
The report said that retailers’ expectations for the holiday shopping season were mixed, with some slashing prices to boost consumer traffic and others feeling more confident about the critical season.
Consumer spending, while up slightly, was still at or below pre-September 11 levels, the report said.
“Most reserve banks reported that sales of luxury goods weakened, as did sales at specialty and department stores,” the Fed said. “In contrast, discount retailers generally experienced stronger sales as consumers sought value.”
The Fed noted that input prices were “flat to lower” in most districts, indicating lower demand for products.
However, the cost of property insurance and health care -- both major cost items for trucking companies -- showed a “dramatic increase” in most districts.
The Beige Book is released eight times a year from information compiled by the Federal Reserve’s 12 district banks.
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