Fed’s Beige Book finds healthier consumer finances
WASHINGTON (12/3/15)--Economic activity has increased at a modest pace in “most regions of the country” in recent weeks, according to the Federal Reserve’s Beige Book, a snapshot of U.S. economic conditions nationwide.
Largely fueled by a strong dollar and still-low oil prices, consumer spending was a leading bright spot in the report, with nearly all districts reporting improving paces of sales.
“Sales of light vehicles remained robust in recent weeks, with low gasoline prices helping to boost sales of light trucks and larger vehicles,” the Federal Reserve said. “Inventory levels were satisfactory.”
The idea that consumerism has strengthened, meanwhile, is in line with remarks Fed Chair Janet Yellen made Wednesday at the Economic Club of Washington--that the domestic economy has been stronger than gross domestic product growth would suggest (MarketWatch Dec. 2).
The stronger dollar has weighed heavily on manufacturing and exports but has not dampened consumer spirit, she said.
“I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market,” Yellen said, adding, “Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2% as the disinflationary effects of energy and import prices wane.”
Additional numbers from the report:
Loan demand increased in a majority of reporting districts, with residential mortgage demand remaining stable;
Labor markets continued to tighten, with Atlanta, Kansas City and Dallas reporting upticks in hiring; and
- Housing markets improved at a moderate pace, with home prices in most districts increasing modestly. Home sales rose in Boston, New York, Philadelphia, Cleveland, Richmond, Chicago and Kansas City.