Economic activity was little changed overall in April and early May, said the Federal Reserve Bank’s Beige Book Wednesday.
Four Districts reported small increases in activity, six had no change, and two saw slight to moderate declines, the report said. Expectations for future growth deteriorated a little, though contacts still largely expected a further expansion in activity.
Consumer expenditures were steady or higher in most districts, the Federal Reserve said, with many noting growth in spending on leisure and hospitality.
Education and healthcare organizations saw steady activity on balance, the Federal Reserve said. Manufacturing activity was flat to up in most districts, and supply chain issues continued to improve.
Demand for transportation services was down, especially in trucking, where contacts reported there was a “freight recession,” the Beige Book said.
Residential real estate activity picked up in most districts despite continued low inventories of homes for sale, the report said. Commercial construction and real estate activity decreased overall, with the office segment continuing to be a weak spot.
Outlooks for farm income fell in most districts, and energy activity was flat to down amidst lower natural gas prices, the Bank said.
Financial conditions were stable or somewhat tighter in most districts, according to the report. Contacts in several districts noted a rise in consumer loan delinquencies, which were returning closer to pre-pandemic levels.
High inflation and the end of Covid-19 benefits continued to stress the budgets of low- and moderate-income households, driving increased demand for social services, including food and housing.
LABOR MARKETS
Employment increased in most districts, though at a slower pace than in previous reports, the report said. Overall, labor market continued strong, with contacts reporting difficulty finding employees across a wide range of skill levels and industries.
However, many contacts also said the labor market had cooled some, highlighting easier hiring in construction, transportation and finance. Many contacts said they were fully staffed, and some reported they were pausing hiring or reducing headcounts because of weaker actual or prospective demand or greater uncertainty about the economic outlook.
Staffing firms reported slower growth in demand. As in the last report, wages grew modestly.
PRICES
Prices rose moderately, though the rate of increase slowed in many districts, the Fed said. Contacts in most districts expected a similar pace of price increases in the coming months.
Consumer prices moved up because of solid demand and rising costs, though several districts noted greater price sensitivity by consumers, the report said. Overall, nonlabor input costs rose, but many said cost pressures had eased and price declines for some inputs like shipping and certain raw materials.
Home prices and rents rose slightly in most districts, after little growth in the prior period, the report said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $171.68 per cwt to $183.03, compared with last week’s range of $169.74 to $183.99 per cwt. FOB dressed steers, and heifers went for $267.34 per cwt to $274.39, compared with $268.57 to $278.21.
The USDA choice cutout Wednesday was up $0.81 per cwt at $305.84 while select was down $0.62 at $287.15. The choice/select spread widened to $18.69 from $17.19 with 111 loads of fabricated product and 26 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.68 to $1.78 a bushel over the Jul corn contract, which settled at $5.94 a bushel, unchanged.
The CME Feeder Cattle Index for the seven days ended Tuesday was $207.61 per cwt, down $0.01. This compares with Tuesday’s Aug contract settlement of $237.77 per cwt, up $3.85.