The Fed’s Beige Book Shows A Mixed Economy

The beige books shows a mixed economy with some regions slow while others having mixed or improved economic conditions. The article is at Market Watch and the original report can be found at the Fed.

Fed districts banks in Kansas City and Dallas reported decelerating growth, while Boston and Atlanta said conditions were "mixed." On the other hand, seven regions reported "modest" or "moderate" growth, while only Philadelphia reported "improved" conditions.

The tenor of the report suggests that the economy is not especially robust at the start of the second half of the year.

Consumer spending rose at a modest pace, but four of the 12 Fed banks reported sales as "mixed" or "below expectations." There was a sense that high gas prices had restrained spending.

Sales related to housing -- such as furniture and home repair materials -- were weak or declining, the survey found.

New car sales were described as "lackluster" or "flat" in many areas.

The housing sector continued to decline, but there were signs of stirring in some areas, the survey said.

Household lending declined in most regions and several districts reported decreasing demand for mortgages and tighter underwriting standards.

But there were also signs of strength in the economy.

Business spending was mentioned frequently in glowing terms. In addition, labor markets appeared to remain tight as employment increased in most regions and in many sectors of the economy. Another positive factor was strong export demand in a number of districts.

Commercial construction and office real estate were generally more active than during May and June, the report said.

There were cost pressures for businesses but prices at the retail level continued to increase at a moderate rate, the study found. Wage gains were also moderate.