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Beige Book shows modest expansion

By Sheyna Steiner · Bankrate.com
Thursday, October 11, 2012
Posted: 5 pm ET

The most recent report from the Federal Reserve shows a modest expansion of the economies in the 12 Federal Reserve Bank districts since the last Beige Book was released at the end of August.

The Beige Book includes anecdotal reports from the 12 Federal Reserve Banks on their districts.

The standout in this edition of the Beige Book was residential real estate. It showed widespread improvement since the last report. Existing home sales were up throughout the country and prices are going up or holding steady.

Declining inventories of homes in Boston, Atlanta, Minneapolis, Dallas and San Francisco have nudged prices up in those areas.

New home construction and sales weren't quite as good but were "mostly improved," the Beige Book says.

The residential real estate market also is going gangbusters in most areas, "even in the New York and Atlanta Districts where rents increased somewhat less strongly than in recent months," according to the report.

Consumer spending was reported to be mostly flat, though vehicle sales were strong and better than last year at this time.

Tourism is down in some areas such as Kansas City and Dallas. The Dallas and Atlanta districts noted that there are fewer tourists from Europe and Asia.

Loan demand is slightly up overall and most districts said mortgage lending was up, particularly refinancing. Though consumer loan demand was strong in many areas, credit standards did not change very much. For businesses in Cleveland, Richmond and Chicago, loans were still hard to get.

The drought besieging much of the country is still impacting agriculture but not quite as badly as it did over the summer. For instance, the St. Louis Fed reported that crops were in better condition than they were at the time of the last report, and harvest rates for rice and corn were higher than the five-year average.

Livestock producers in the Atlanta, Chicago, Minneapolis, Dallas and San Francisco Fed districts reported that higher feed prices are an ongoing concern.

Since the August report, the employment picture has not changed for most areas due to uncertainty around the election, the so-called fiscal cliff and the economies of Europe. In New York and Chicago, labor market conditions were weaker than they were previously.

Most Fed districts reported that prices have remained stable except for some agricultural commodities and petroleum-based products, generally known as food and gas, that have gotten more expensive in some areas.

Is the economy improving in your area of the country? Let us know if you think the Fed's Beige Book is accurate.

Follow me on Twitter @SheynaSteiner.

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