Modest is the word most used in the preface of the just-released Beige Book to describe economic activity across the country this fall. That preface notes that five of the dozen Federal Reserve Systems, as of the last week of November, were reporting “slight or modest gains in activity,” with the rest experiencing “slight-to-modest declines.” The preface additionally notes that “residential construction slid further at a modest pace,” while nonresidential construction was “mixed but down slightly on average.” Published eight times a year by the by the Federal Reserve, the Beige Book is a compilation of interviews with business people, economists, and market experts, among others, gathered from all twelve districts of the Federal Reserve. Meant to be nothing more than a reflection of current economic attitudes and opinions, the Beige Book has come to be regarded as predictive by some economists and policymakers. The latest publication reporting on trends in the Kansas City-based Tenth District, which takes in all of Colorado and northern New Mexico, notes that overall activity was slightly off. “Job growth was subdued as labor demand cooled. Prices continued to rise at a robust pace, but several contacts noted growth in prices of construction materials and other manufacturing inputs slowed.” At the same time multifamily housing real estate activity swiftly declined in the Tenth District, “while energy activity expanded slightly.” The Eleventh District, based in Dallas, including all of Texas and southern New Mexico, saw declines in retail spending, home sales, and lending activity. “Input and labor cost increases continued, prompting cost cutting and downsizing some firms,” the report continued of Eleventh District conditions, while “outlooks were generally pessimistic, with contacts again citing concerns about inflation, labor shortages, and slowing demand.” Meanwhile, the Twelfth District, based in San Francisco and encompassing all of Arizona, reported tight labor market conditions, slowly increased manufacturing activity, and an increase in the demand for retail goods and services. “Residential real estate activity weakened, and lending activity declined moderately,” the report added of overall Twelfth District trends. The latest Beige Book findings, contends the Wall Street Journal, are proof of “greater uncertainty and increased pessimism for the U.S. economy.” The publication GlobeSt, at the same time, said the publication reveals “no big disasters, just small setbacks gathering everywhere.” By Garry Boulard
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