The latest report from the Fed Beige Book shows that the economy grew at a measured pace during the past months. This is on the heels of the previous report stating that the economy grew at a modest pace. The bottom line of the Fed report is that the economic growth, while quite a bit slower than many people would like, is still positive economic growth.
The retails sales section of the report indicates many positives. Sales for the first half of October were strong, but cut off sharply due to hurricane Sandy. Despite the hurricane, many retailers are expecting sales to pick back up as people continue their holiday shopping, and as they replace damaged or destroyed goods. Auto sales, while they did slump around the hurricane, have remained fairly healthy.
Agriculture received mixed reports from the various districts. Some areas are doing well; however, much of the country is still entangled in a drought that has resulted in diminished crop yields. The diminished yields have resulted in a low supply, however, the overall agricultural picture is somewhat balanced out by some districts reporting an increased return on investment.
The employment situation is looking better than it has for a while. Most districts are reporting that the labor market is up, and more people are able to find and retain employment. However, there is talk that some of the major employers will start to hire more part-time and seasonal employees rather than full- time. Regardless, more people working will help to drive future retail sales.
The housing sector is doing quite well. Most districts are reporting increases in housing sales, and many of them are noting strong sales. Boston and Philadelphia were the only two districts that showed housing was not doing well; New York sales were firm prior to the hurricane.
The overall book contained many mixed reports. Some areas were doing quite well, others just moderate improvements, and some showing a slumping economy. The overall picture is that the economy is on track and is looking for something to encourage more rapid growth. Unfortunately, some un-favorable weather conditions have affected sales and thrown a wrench into the latest beige book.
Despite the downfalls, the slow recovery is still a recovery. Moving forward slowly is still better than moving backward. Not as many people are getting back to work as most people would like, but they are doing well enough to keep the unemployment numbers from increasing. The beige book is released 8 times per year approximately 2 weeks before the monetary policy meetings. It is a compilation of how the 12 Federal Reserve districts see the economy as faring.