US Economic Activity – Modest Growth

According to a survey conducted by the Federal Reserve, US economic activity has strengthened since November. The report, “Summary of Commentary on Current Economic Conditions by Federal Reserve District” is an aggregate document from the 12 US reserve banks. Better known as the Beige Book, the report is published 8 times per year and pulls together anecdotal information on the current economic climate in the 12 districts. It relies on reports from bank and branch directors together with intelligence gathered from talking to key businesses and financial analysts. Responsibility for generation of the report rotates between the district Federal Reserve banks.

The most recent edition of the Beige Book notes that there has been a modest increase in retail sales. Car sales and the housing market had improved or remained stable in all 12 districts with the improvements being identified as modest to moderate. New housing construction was higher in 11 of the 12 reporting districts during the period under review and prices rising in all 12 districts for house sales. Retail figures for Christmas 2012 showed a modest improvement over the 2011 figures.
On the downside, the report notes that unemployment trends and prices showed little change in the 12 reporting districts and that the unresolved aspects stemming from the Fiscal Cliff dilemma were still stifling confidence. Notably, in the Chicago and New England districts, companies identified the Fiscal Cliff as the reason why they were reluctant to hire new staff.
The report will be used to help shape monetary policy at the Federal Reserve’s next meeting which is planned for the end of January.