The Federal Reserve Bank of Minneapolis earlier this afternoon released the latest Beige Book summary of economic activity across the United States. That report, which was based on information collected before November 18, 2011, indicated that aggregate economic activity had increased at a slow to moderate pace since the prior report. The lone exception was in the St. Louis region, where aggregate activity has declined of late.

Among the areas showing some strength were consumer spending, motor vehicle sales, and tourism. Also, business service activity was flat to higher, while manufacturing expanded at a steady pace across most of the country. Conversely, residential real estate activity remained sluggish along with commercial activity. Finally, hiring was still subdued, as might be expected given the elevated level of new layoffs. However, there was no overall deterioration in this critical metric.

By region, the gains in consumer spending were most noticeable in Kansas City, while gains in retail sales were observed in Richmond, Philadelphia, Cleveland, Minneapolis, and San Francisco. Also, same-store sales in New York were mostly on or ahead of plan. On the other hand, weaker consumer activity was noted in Atlanta and St. Louis.

At the other end of the spectrum, selective manufacturing gains were reported in Chicago, San Francisco, and even in St. Louis, which was otherwise weak. Philadelphia, meanwhile, saw decreased demand for primary metals. Cleveland and Chicago, once among the larger steelmaking districts in the country, reported increased auto output.

At the same time, bank lending activity increased in New York, Philadelphia, Cleveland, and Kansas City, while Chicago, St. Louis, Dallas, and San Francisco saw little change in this area. Atlanta, however, saw soft loan demand.

As noted, hiring was generally subdued, but some firms with open positions reported difficulty in finding qualified applicants. Stable employment levels or subdued hiring were mentioned in New York, Philadelphia, Cleveland, Atlanta, Chicago, and Dallas. All in all, it was an unexciting report, but not one for the Fed to get unduly concerned with. There seemed to be no increased risk of a recession in the report, the odds of which we still think are at one in three, at this time.


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