Central Banks

Wednesday, November 27, 2019 - 14:00

TEXT: Federal Reserve Beige Book Summary Section

WASHINGTON (MNI) - The following is the text of the summary section of the Federal Reserve's summary of economic conditions report, or Beige Book, released Wednesday:

Overall Economic Activity

Economic activity expanded modestly from October through mid-November, similar to the pace of growth seen over the prior reporting period. Most Districts reported stable to moderately growing consumer spending, and increases in autosales and tourism were seen across several Districts. In manufacturing, more Districts reported an 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. Transportation activity was rather mixed across Districts. Reports from the banking sector indicated continued but slightly slower growth inloan volumes. Home sales were mostly flat to up, and residential construction experienced more widespread growthcompared to the prior report. Construction and leasing activity of nonresidential real estate continued to increase at amodest 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. 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 U.S. Several Districtsnoted relatively strong job gains in professional and technical services as well as healthcare. Reports were mixed foremployment in manufacturing, with some Districts noting rising headcounts while others noted stable employmentlevels and one District reported layoffs. 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 marketremained very tight. The shortage of workers spanned most industries and skill levels, and some contacts notedthat their inability to fill vacancies was constraining business growth. Moderate wage growth continued across mostDistricts. Wage pressures intensified for low-skill positions.


Prices rose at a modest pace during the reporting period. 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 pressuresand a few indicated little to no change. Retailers mentioned higher costs, which contacts in some Districts attributedto tariffs. Firms ability to raise prices to cover higher costs remained limited, though a few Districts noted thatcompanies affected by the tariffs were more inclined to pass on cost increases. Service sector prices in reporting Districtswere mostly flat to up. Energy and steel prices were flat to down, while reports on construction materials andagricultural commodity prices were mixed. Overall, firms generally expected higher prices going forward.

* Prepared at the Federal Reserve Bank of Dallas based on information collected on or before Nov. 18.

** MNI Washington Bureau (202) 371-2121 **


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