Fed’s Beige Book Sees Slight-to-Moderate Growth
Economic activity continued to grow slowly across the U.S. in the spring but some sectors expected growth to pick up in the coming months, according to a Federal Reserve report released this week.
The Fed’s 12 regional districts saw a “slight-to-moderate pace” of growth in recent weeks, the central bank said in its “beige book” report collecting anecdotes from business contacts around the country. The report was based on information collected through April 8.
Retailers generally had seen sluggish sales, the report said, with some blaming unusually cold weather for the slump. But retailers in the Cleveland district were optimistic conditions would pick up in the second quarter “because of warmer weather, plant sales, and several holidays.”
The picture was also mixed in the tourism industry. Hotel occupancy rates in New York have slipped “well below comparable 2018 levels,” as have sales of Broadway tickets, the report said.
Contacts in the Philadelphia region were more upbeat. A late winter snowstorm brought more people to ski resorts “while a high-end shore hotel had its best February ever.”
Manufacturers and agriculture businesses continue to worry about the impact of Chinese tariffs, the report said. Several said they were dealing with higher input costs that they struggled to pass onto consumers.
One small homebuilder in the Philadelphia region went so far as to stockpile a three-year supply of nails in anticipation, the report said.
Meanwhile, employers said the tight labor market was still making it hard for them to fill open spots, particularly for skilled positions in manufacturing and construction. Several said they had raised wages moderately while expanding benefits.
A banker in central Minnesota reported that “some companies have money to expand but were fearful that they won’t be able to fill the jobs they create.”
One bright spot appears to be the housing market, where lower mortgage rates could signal a strong spring buying season. Housing contacts in the Dallas district “reported a noticeable pickup in foot traffic and home sales starting in mid-February through March” even though overall sales were flat from a year ago.
Blizzards and flooding have added to the woes of Midwestern farmers already grappling with Chinese tariffs. Contacts in the agriculture industry in the St. Louis, Chicago and Minneapolis regions said the weather could cause them to delay planting and could affect crop yields this year.
Source: Dow Jones