The US Federal Reserve’s Beige Book Wednesday said overall economic activity increased slightly since late May.
Five districts reported slight or modest growth, five noted no change, and two reported slight and modest declines, the report said.
CONSUMER SPENDING
Reports on consumer spending were mixed. Growth was generally observed in consumer services, but some retailers reported shifts away from discretionary spending, the Beige Book said. Tourism and travel activity were robust, and hospitality contacts expected a busy summer season.
Auto sales remained unchanged or exhibited moderate growth across most districts, the report said. Manufacturing activity edged up in half of the districts and declined in the other half.
Transportation activity was down or flat in most districts that reported on it, as some contacts reported reduced demand because of high inventory levels, and others noted continued challenges from labor shortages, the Beige Book said.
Banking conditions were mostly subdued, as lending activity continued to soften, the report said. Despite higher mortgage rates, demand for residential real estate remained steady, although sales were constrained by low inventories. Construction for residential and commercial units was slightly lower on balance.
Agricultural conditions were mixed geographically but softened slightly on balance, with some contacts expecting further softening for the rest of 2023, the report said. Energy activity decreased.
Overall economic expectations for the coming months generally continued to call for slow growth, the Beige Book said.
LABOR MARKETS
Employment increased modestly this period, with most districts experiencing some job growth, the report said. Labor demand remained healthy, though some contacts reported hiring was becoming more targeted and selective.
Employers continued to have difficulty finding employees, particularly in health care, transportation, hospitality and high-skilled positions in general.
However, many districts reported labor availability had improved and that some employers were having an easier time hiring than they had been having. Employers also reported that unusually high turnover rates in recent years appeared to be returning to pre-pandemic norms.
Wages continued to rise, but more moderately, the Beige Book said. Contacts in multiple districts reported wage increases were returning to or nearing pre-pandemic levels.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $178.00 per cwt to $186.59, compared with last week’s range of $177.10 to $190.00 per cwt. FOB dressed steers, and heifers went for $280.75 per cwt to $285.96, compared with $280.53 to $289.54.
The USDA choice cutout Wednesday was down $1.14 per cwt at $310.98 while select was up $0.86 at $281.10. The choice/select spread narrowed to $29.88 from $31.88 with 139 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 $1.75 to $1.95 a bushel over the Sep corn contract, which settled at $4.76 1/4 a bushel, down $0.18 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $238.11 per cwt, down $0.22. This compares with Wednesday’s Aug contract settlement of $246.57 per cwt, down $0.57.