Fed Beige Book: On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth

OVERALL ECONOMIC ACTIVITY:

• On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth.


• Most Districts reported declining manufacturing activity.


• Activity in the banking sector was generally steady to up slightly, and loan demand was mixed, with some Districts noting an improvement in the outlook due to the decline in interest rates.


• Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives.


• Housing market activity has generally held up: inventory continued to expand in much of the nation, and home values largely held steady or rose slightly.


• Still, uncertainty about the path of mortgage rates kept some buyers on the sidelines, and the lack of affordable housing remained a persistent problem in many communities.


• Commercial real estate markets were generally flat, although data center and infrastructure projects boosted activity in a few Districts.


• The short-lived dockworkers strike caused only minor temporary disruptions.


• Hurricane damage impacted crops and prompted pauses in business activity and tourism in the Southeast.


• Agricultural activity was flat to down modestly, with some crop prices remaining unprofitably low.


• Energy activity was also unchanged or down modestly, and lower energy prices reportedly compressed producers’ margins.


• Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.

LABOR MARKETS:

• On balance, employment increased slightly during this reporting period, with more than half of the Districts reporting slight or modest growth and the remaining Districts reporting little or no change.


• Many Districts reported low worker turnover, and layoffs reportedly remained limited.


• Demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth.


• Worker availability improved, as many contacts reported it had become easier to find the workers they need.


• However, contacts noted that it remained difficult to find workers with certain skills or in some industries, such as technology, manufacturing, and construction.


• Wages generally continued to rise at a modest to moderate pace.


• With the improvement in worker availability, contacts in multiple Districts pointed to a slowdown in the pace of wage increases. 


• Still, larger than usual pay increases were reported for some workers, such as those in the skilled trades or in remote areas.

PRICES:

• Inflation continued to moderate with selling prices reportedly increasing at a slight or modest pace in most Districts


• Still, the prices of some food products, such as eggs and dairy, were reported to have increased more sharply.


• Home prices edged up in many Districts, while rents were reported to be steady or down slightly.


• Many Districts noted increasing price sensitivity among consumers. Input prices generally rose moderately.


• Contacts across several industries noted more acute pressures from rising insurance and healthcare costs.


• Multiple Districts reported that input prices generally rose faster than selling prices, compressing firms’ profit margins.

23 Oct 2024 - 19:00- Fixed IncomeImportant- Source: Fed