Fed ‘Beige Book’ Cites Sluggish Economy
Nine of the Federal Reserve’s 12 districts reported that economic conditions weakened from late February through early April, and the Fed said record high fuel costs were hurting trucking companies who were struggling to pass on the soaring costs to customers.
Only the Fed’s Boston, Cleveland and Richmond districts described economic activity as “mixed or steady,” the Fed said in its latest “beige book” report, released Wednesday. The report was based on information collected from Feb. 26 through April 7.
The Atlanta district reported that demand for domestic freight services continued to be weak and said that “high diesel prices were lowering the profitability of many trucking companies that have not been able to pass on higher fuel costs to their customers.”
The Chicago district reported that rising diesel fuel prices were putting some small trucking firms out of business and causing others to reduce activity, as fuel surcharges were insufficient to cover costs.
Automobile sales were generally flat or declining in most districts, with sales described as unchanged or falling in the Philadelphia, Cleveland, Atlanta and Dallas districts, and weak in Richmond, Atlanta, Chicago, and San Francisco. The Kansas City district reported that auto sales rebounded in March, though they remained below a year earlier.
Manufacturers and others businesses were hit by soaring energy and raw materials prices, and were not always able to pass on those costs to retail customers, according to the beige book report, which the Fed releases eight times a year.
