The Federal Reserve Bank’s Beige Book, a monthly treatise on US economic activity and health said in its October report that most Federal Reserve districts indicated little to no change in economic activity since the September report.
Consumer spending was mixed, especially among general retailers and auto dealers, because of differences in prices and product offerings, the Beige Book said. Tourism activity continued to grow, although some districts reported slight slowing in consumer travel, and a few districts noted an uptick in business travel.
Banking contacts reported slight to modest declines in loan demand, the report said. Consumer credit quality generally was described as stable or healthy, with delinquency rates still historically low but increasing slightly.
Real estate conditions were little changed, and the inventory of homes for sale remained low, the Federal Reserve said.
Manufacturing activity was mixed, although contacts across multiple districts noted an improving outlook for the sector, the Beige Book said.
The near-term outlook for the economy generally was described as stable or having slightly weaker growth, the report said. Expectations of firms for which the holiday shopping season is an important driver of sales were mixed.
LABOR MARKETS
Labor market tightness continued to ease across the nation, the Beige Book said. Most districts reported slight to moderate increases in overall employment, and firms were hiring less urgently.
Several districts reported improvements in hiring and retention as candidate pools have expanded and those receiving offers have been less inclined to negotiate terms of employment, the report said.
However, most districts still reported ongoing challenges in recruiting and hiring skilled tradespeople, the Federal Reserve said. A few highlighted that older workers were remaining in the labor force, either staying in their existing position or returning in a part-time capacity.
Wage growth remained modest to moderate in most districts, the Beige Book said. Contacts across many districts reported less pushback from candidates on wage offers.
There were multiple reports of firms modifying their compensation packages to mitigate higher labor costs, including allowing remote work in lieu of higher wages, reducing sign-on bonuses or other wage enhancements, shifting compensation to more performance-based models and passing on a greater share of healthcare and other benefits costs to employees.
PRICES
Prices continued to increase at a modest pace, the report said. Districts said manufacturing input cost increases have slowed or stabilized but continue to rise for service firms.
Increases in fuel costs, wages and insurance contributed to price growth across districts, the report said. Sales prices increased at a slower rate than input prices, as businesses struggled to pass along cost pressures because consumers had grown more sensitive to prices.
As a result, firms struggled to maintain desired profit margins.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $185.00 per cwt to $186.46, compared with last week’s range of $182.09 to $187.00 per cwt. FOB dressed steers, and heifers went for $289.07 per cwt to $292.40, compared with $285.90 to $294.21.
The USDA choice cutout Tuesday was up $1.44 per cwt at $305.98 while select was up $2.98 at $284.00. The choice/select spread narrowed to $21.98 from $23.52 with 82 loads of fabricated product and 19 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 $1.25 to $1.35 a bushel over the Dec corn contract, which settled at $4.84 a bushel, down $0.06 1/4.
No live cattle contracts were posted for delivery Tuesday.
The CME Feeder Cattle Index for the seven days ended Friday was $243.56 per cwt, down $0.43. This compares with Monday’s Oct contract settlement of $237.62, down $4.20.