WASHINGTON (10/15/15)--Between mid-August and the end of September, economic activity accelerated in 11 out of the 12 districts that report to the Federal Reserve for its Beige Book, a general snapshot of the state of the U.S. economy.
While Kansas City reported a slight decline in economic activity, the remaining districts reported at least modest to moderate expansion.
For all districts, however, the strong dollar, propped up by weakening international economic conditions, has put downward pressure on manufacturing and tourism growth.
“The Federal Reserve’s October Beige Book suggests that the economy is making steady progress,” said Christopher Velarides, Moody’s analyst (Economy.com Oct. 14). “Many industries in most districts improved over the six-week reporting period. This report seemed generally more upbeat than the previous one, with commendable improvements throughout industries and geographies.”
The Federal Reserve said that consumer spending increased at a moderate pace during the reporting period, with most districts relaying that non-auto sales climbed at a modest or moderate rate, while vehicle sales increased more dramatically.
Both housing and commercial real estate strengthened since the previous report, with home prices and sales volume improving in almost all regions. Furthermore, many districts said that they witnessed relative strength in the market for lower or moderately priced homes.
“Reports on the banking and finance sector were generally positive,” the Federal Reserve said. “Lending activity increased, loan quality was steady to improved, and lending standards were little changed or somewhat easier.”
The Fed also found that labor markets across most districts continued to tighten, with several reporting labor shortages for skilled workers, a common theme from previous reports.
“Wage growth was mostly subdued, though there were scattered reports of increased wage pressures,” the Fed said.