The Federal Reserve's Beige Book, the summary of economic conditions across the 12 central bank Districts showed that economic conditions continued to expand from January through the first part of February. Specifically, eight of the twelve Federal Reserve Districts reported improved levels of activity, with most of the increases being characterized as modest to moderate.

On the other hand, two of the Districts, New York and Philadelphia, experienced a slight decline in business activity, which was mostly attributed to the unusually severe weather in those East Coast regions of the country. Meanwhile, growth slowed in Chicago and remained generally stable in Kansas City.

Breaking the report down by industry, we find that retailing growth weakened in most Districts, once again seemingly reflecting the run of inclement weather. However, Richmond, St. Louis, and Minneapolis have seen modest improvement at the retail counter since the beginning of the year. Cleveland saw strong retail gains. Moreover, tourism either stabilized or gained in all regions, save for Philadelphia.

At the same time, demand for non-financial services was mixed, overall, but Boston and San Francisco reported strong demand for technology related services. Then, too, the residential real estate markets improved in several regions, albeit modestly, with New York and Boston just mixed, while Philadelphia, Cleveland, Minneapolis, and Kansas City observed a weakening in these markets. Finally, employment levels improved gradually in most Districts, with selective shortages being noted, especially in specialized markets.

Taken as a whole, there were few surprises here. The selective sluggishness was largely a weather-driven event according to the Fed, which should pass once the temperatures climb, which, according to weather reports, could be as early as the next few days. Assuming that this change is a sustainable one, the next Beige Book, which will come out in some six weeks, will be telling. The muted reaction to most economic reports at this time reflects the belief by many that the weakness is a transitory event.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.