The overall assessment of the Beige Book from the Federal Reserve is not optimistic. Economic activity in most regions remained flat or declined, increasing from 5 regions in July to 9 regions, with only slight growth in three regions, while consumer spending in most regions slowed down. The labor market is mixed, with employers becoming more selective and unwilling to hire new employees, but layoffs are still rare. Analysts say that the Fed is increasingly concerned about the pace of economic growth, which is one of the reasons why Powell turned dovish in his speech at Jackson Hole.
On Wednesday, September 4th, Eastern Time, the Federal Reserve released the so-called "Beige Book", a national economic survey report compiled by 12 regional banks. The report shows that economic activity in most areas of the United States has remained flat or declined in recent weeks.
The Beige Book is published two weeks before the Federal Open Market Committee (FOMC) policy meeting. This Beige Book is compiled by the Cleveland Fed and summarizes anecdotes and comments on the business conditions in the regions where the 12 regional banks are located, based on information collected prior to August 26th.
Economic activity in most areas has remained flat or declined, and consumer spending has slowed down.
According to the Beige Book, economic activity in three regions has slightly increased, while the number of regions reporting flat or declining economic activity has increased from 5 in the July report to 9.
Overall, the employment level is stable, but some companies have only hired necessary positions, reduced employee working hours and shifts, or reduced the overall number of employees through natural attrition such as retirement or resignation. However, overall layoffs are relatively few. Wage growth is generally moderate, and non-labor costs and commodity prices have also increased, but the overall rate of increase is kept within a slight to moderate range.
Consumer spending in most areas has slightly declined, while in the previous reporting period, consumer spending remained stable overall. The situation of car sales varies in different regions, with car sales increasing in some areas, while in other areas, sales have slowed down due to high interest rates and high car prices.
Manufacturing activity has declined in most areas, and two regions have pointed out that this is part of an ongoing contraction in the industry. Reports on residential and commercial real estate markets vary by region, but most areas report a slowdown in home sales.
The situation of residential construction and the real estate market is mixed, but most areas report weak home sales. The performance of commercial construction and real estate also varies.
Overall, economic activity in most areas is expected to remain stable or improve, but there are three regions where economic activity is expected to decline slightly.
The labor market is mixed, with companies reluctant to expand their workforce but layoffs still rare.
In recent weeks, overall employment levels have remained steady or even slightly increased. The number of employees in five regions has slightly increased, but some companies in certain areas have reduced their workforce through reducing shifts and hours, not advertising open positions, or natural attrition such as retirement or resignation. However, layoffs are still rare.
Employers have become more selective and less willing to expand their workforce, primarily due to concerns about insufficient demand and economic uncertainty. As a result, job seekers face increased difficulty and longer search times. With weakened competition for workers and a decrease in employee attrition, the pressure for wage increases has decreased for businesses.
Overall, wage growth remains moderate, in line with the recent reports of a slowdown. However, there is still a shortage of skilled technical workers, and workers with special skills experience greater wage growth. Union members also see faster wage increases.
In recent weeks, there has been a slight increase in prices.
Overall, there has been a small increase in prices recently, but the magnitude is not significant. Three regions have reported only a slight increase in sales prices. Non-labor costs for businesses, such as raw materials, are mostly described as having a moderate to moderate increase, with some overall easing, although one region mentioned a slight increase in these costs. Some areas mentioned that freight and insurance costs continue to rise. In contrast, cost pressures for food, lumber, and concrete have eased in some regions.
Looking ahead, many companies believe that price and cost pressures may remain stable or further alleviate in the coming months.
After the release of the Brown Book, the US dollar index DXY continued to decline during the day. The main indices of the US stocks also fell slightly, only the Dow Jones Industrial Average, which gathers blue chip stocks, rose. The yields of the 2-year and 10-year US Treasury bonds also fell in the short term.
Editor/ping