According to the Federal Reserve's latest report on the state of the economy, things may be improving - slightly. The report, known as the "beige book," is a summary of economic conditions in the 12 Federal Reserve districts. The Wall Street Journal says the report "reinforced expectations that the U.S. recession that began in December 2007 may be nearing an end." My personal reaction was that the report sounds more like the guy from Monty Python's "Bring out your dead" sketch - it may not be dead, but it sure isn't looking very good. We are clearly not out of the woods yet.
Here are some highlights from the official summary:
- Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer.
- Most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level.
- Most Districts reported sluggish retail activity.
- Manufacturing activity showed some improvement in the Richmond, Chicago, and Kansas City Districts; while St. Louis and Dallas reported some moderation of declines; Philadelphia and Minneapolis saw activity decrease; and most other Districts indicated that manufacturing activity continued at low levels.
- Boston, Richmond, St. Louis, Minneapolis, and San Francisco reported contractions in services industries.
- Banking sectors in the New York, Cleveland, Richmond, St. Louis, Kansas City, and San Francisco Districts experienced weaker demand for some categories of loans.
- Residential real estate markets stayed soft in most Districts, although many noted some signs of improvement.
- Commercial real estate markets weakened further in recent months in two-thirds of the Districts and remained slow in the others.
- Districts reported varied--but generally modest--price changes across sectors and products, with competitive pressures damping increases; however, Boston, Cleveland, Chicago, Minneapolis, and Dallas noted that some metals prices have increased in recent months.
- Most Districts indicated that labor markets were extremely soft, with minimal wage pressures, and cited the use of various methods of reducing compensation in addition to, or instead of, freezing or cutting wages.