Beige Book: Modest Economic Growth In July, August

Contacts from most Federal Reserve districts indicated in the Bank’s Beige Book that economic growth was modest during July and August.

The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve districts.  It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each district’s sources.  Reports are published eight times per year.




Consumer spending on tourism was stronger than expected, surging during what most contacts considered was the last stage of pent-up demand for leisure travel from the pandemic era, the report said.  But other retail spending continued to slow, especially on non-essential items.

Some districts highlighted reports suggesting consumers may have exhausted their savings and were relying more on borrowing to support spending, the Bank said.  New auto sales did expand in many districts, but contacts noted this had more to do with better availability of inventory rather than increased consumer demand.

Manufacturing contacts in several districts also noted that supply chain delays improved and that they were better able to meet existing orders, the Beige Book said.  New orders were stable or declined in most districts, and backlogs shortened as demand for manufactured goods waned.

One sector where supply did not become more available was single-family housing, the Bank said.  Nearly all districts reported the inventory of homes for sale remained constrained.

Accordingly, new construction activity picked up for single-family housing, the report said.  But multiple districts noted construction of affordable housing units was increasingly challenged by higher financing costs and rising insurance premiums.

Bankers from different districts had mixed experiences with growth in loan demand, the report said.  Most indicated that consumer loan balances rose, and some districts reported higher delinquencies on consumer credit lines.

Agriculture conditions were somewhat mixed, but reports of drought and higher input costs were widespread, the Beige Book said.

Energy activity was mostly unchanged during the final months of the summer, the report said.




Job growth was subdued across the nation, the Bank said.  Though hiring slowed, most districts indicated imbalances persisted in the labor market as the availability of skilled employees and the number of applicants remained constrained.

Employee retention improved in several districts but only in certain sectors like manufacturing and transportation, the report said.  Many contacts suggested “the second half of the year will be different” when describing wage growth.

Growth in labor cost pressures was elevated in most districts, often exceeding expectations during the first half of the year, the Bank said.  But nearly all districts indicated businesses renewed their previously unfulfilled expectations that wage growth will slow broadly in the near term.




The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $178.95 per cwt to $187.74, compared with last week’s range of $178.95 to $187.74 per cwt.  FOB dressed steers, and heifers went for $279.95 per cwt to $289.11, compared with $282.62 to $289.11.

The USDA choice cutout Thursday was down $1.18 per cwt at $306.37 while select was off $0.33 at $286.86.  The choice/select spread narrowed to $19.51 from $20.36 with 119 loads of fabricated product and 12 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 $1.50 to $1.70 a bushel over the Dec corn contract, which settled at $4.80 1/2 a bushel, down $0.01 3/4.

The CME Feeder Cattle Index for the seven days ended Wednesday was $251.21 per cwt, up $0.05.  This compares with Thursday’s Sep contract settlement of $255.17 per cwt, up $1.67.