US economic activity expanded modestly from October through mid-November, similar to the pace of growth seen over the prior reporting period, said the US Federal Reserve Bank in its latest Beige Book.
Most Federal Reserve districts reported stable to moderately growing consumer spending, and increases in auto sales and tourism were seen across several districts, the Beige Book said.
In manufacturing, more districts reported more expansion in the current period than the previous one, though the majority continued to experience no growth.
The picture for nonfinancial services remained quite positive, with most districts reporting modest to moderate growth, the Fed said.
Transportation activity was rather mixed across districts, and reports from the banking sector indicated continued but slightly slower growth in loan volumes.
Home sales were mostly flat to up, and residential construction experienced more widespread growth compared with the prior report, the Beige Book said. Construction and leasing activity of nonresidential real estate continued to increase at a modest pace.
Agricultural conditions were little changed overall, remaining strained by weather and low crop prices.
Activity in the energy sector deteriorated modestly among reporting districts, the Federal Reserve said.
Outlooks generally remained positive, with some contacts expecting the current pace of growth to continue into next year.
EMPLOYMENT AND WAGES
Employment continued to rise slightly overall, even as labor markets remained tight across the US, the Beige Book said. Several districts noted relatively strong job gains in professional and technical services as well as healthcare.
Reports were mixed for employment in manufacturing, with some districts noting rising headcounts while others reported stable employment levels and one district reported layoffs, the Fed said. There were scattered reports of labor reductions in retail and wholesale trade.
The vast majority of districts continued to note difficulty hiring driven by a lack of qualified applicants as the labor market remained very tight. The shortage of workers spanned most industries and skill levels, and some contacts noted that their inability to fill vacancies was constraining business growth.
Moderate wage growth continued across most districts. Wage pressures intensified for low-skill positions, the Beige Book said.
PRICES
Prices rose at a modest pace during the reporting period, the Federal Reserve said. Reports regarding input costs and selling prices in the manufacturing sector were mixed, with some districts noting deceleration in prices, while others cited increased cost pressures and a few indicated little to no change.
Retailers mentioned higher costs, which contacts in some districts attributed to tariffs, the Fed said. Firms’ ability to raise prices to cover higher costs remained limited, though a few districts noted that companies affected by the tariffs were more inclined to pass on cost increases.
Service sector prices in reporting districts were mostly flat to up.
Energy and steel prices were flat to down, while reports on construction materials and agricultural commodity prices were mixed, the Beige Book said.
Overall, firms generally expected higher prices going forward.
CATTLE, BEEF RECAP
Cash cattle trading this week has occurred at $117 to $120 per cwt on a live basis, up $2 to $3 from last week. Dressed-basis trade was reported at $187 per cwt, up $3 to $7.
The USDA choice cutout Wednesday was down $0.40 per cwt at $232.24, while select was down $1.65 at $210.64. The choice/select spread widened to $21.60 from $10.55 with 85 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday was $145.02 per cwt, up $0.23 from the previous day. This compares with Wednesday’s Nov contract settlement of $143.32, up $1.70.