Beige Book: Economy continued to expand at a moderate pace

According to the Beige Book, a report about the conditions of the US economy, activity continued to expand during the period from August to early October. The document signaled that 11 out of the 12 districts indicated a modest or moderate pace of expansion while the New York district, no change in activity overall. 

The outlook was mostly positive according to the Fed, with growth expected to continue at a slight to moderate pace in most districts. Labor market conditions remained tight while manufacturing activity was mixed said the Beige Book. 

Key Quotes: 

Employment expanded at a modest pace over the reporting period. Reports of hiring were strongest in the Richmond, Chicago, St. Louis, and San Francisco Districts. Layoffs in the manufacturing sector were noted in the New York, Philadelphia, Cleveland, and Richmond Districts. The Dallas District reported that energy-sector layoffs had abated, and manufacturing employment was stable following payroll reductions in recent months.”

Labor market conditions remained tight across most Districts. While reports of labor shortages varied across skill levels and industries, there were multiple mentions of difficulty hiring in manufacturing, hospitality, health care, truck transportation, and sales. The Richmond, Dallas, and San Francisco Districts noted a lack of construction workers, with some contacts noting these shortages were constraining construction activity.”

Wage growth held fairly steady at modest levels, although some Districts reported rising pressure for certain sectors.”

“Overall price growth was mild. Most Districts reported flat input costs, although a slight increase was noted by firms in the Kansas City and Dallas Districts, and among manufacturing firms in the Richmond and Minneapolis Districts.”

Manufacturing activity was mixed, and the strong dollar continued to dampen exports of manufactured goods according to a few District reports. Most regions saw an uptick in retail spending, and outlooks were for modest growth in the months ahead.”

“Residential construction and real estate activity expanded further, although low home inventories continued to constrain sales in a few Districts. Home price appreciation continued at a modest pace in general, and commercial real estate activity and construction improved since the last report.”

“Demand for business and consumer loans increased, aside from some seasonal slowing, and credit quality remained strong or improved.”

Agricultural conditions were mixed, as low commodity prices pressured farm revenues despite generally strong crop yields. There were signs of stabilization in the oil and natural gas sector, while reports of coal production were mixed.”