Some bright spots in the economy were revealed; after May's employment report, which showed fewer than 70,000 jobs added for the month, the Beige Book shows that not everything in the economy is going to pot. The report does note that growth is slower than the quicker pace seen earlier this year in some areas and industries.
Only one district, Philadelphia, reported slowing economic growth overall since the previous Beige Book in April.
Moderate, modest and steady described the growth in the other eleven districts: New York, Cleveland, Atlanta, Chicago, Kansas City, Mo., Dallas, San Francisco, Richmond, Va., St. Louis, Minneapolis and Boston.
Manufacturing slowed slightly in Philadelphia, Richmond, Va., and St. Louis.
Retail spending was flat to modestly positive nearly everywhere, according to the report.
Car sales were strong but did soften a little bit in some areas.
Real estate activity picked up in most of the districts since the April report. Though the pace of home sales lagged historical averages, in most areas they were higher than last year. Inventories of homes decreased in most districts as well.
Not all districts reported on banking and finance activity but of those that did, demand for loans was steady or up slightly.
According to the report, most districts reported a decline in loan delinquencies as well.
Most districts also reported stability or even increases in hiring.
From the Beige Book:
Reports of hiring were most prevalent in the manufacturing, construction, information technology, and professional services sectors. Staffing firms in the Cleveland and Dallas Districts noted a pickup in orders, and contacts in the Boston and Philadelphia Districts reported steady growth in orders. Demand for temporary workers rose in the Richmond District, and several employers in the Minneapolis District noted a tightening labor market. New York's report indicated that demand for staffing services was mixed, but manufacturers and other business contacts expect hiring to pick up in coming months. Atlanta's report pointed to positive employment growth in the District. Hiring remained limited in the Chicago District, and modest employment increases were noted in the San Francisco District report. There were widespread reports that firms continued to face difficulty finding highly trained or skilled workers--especially in information technology, engineering, and manufacturing fields -- and manufacturers in the Chicago District said they were easing job requirements or using interns to fill open positions. Overall upward wage pressures continued to be fairly modest. There were reports of slight wage increases for skilled workers in the Boston, Cleveland, Minneapolis, Dallas and San Francisco. Contacts in the Philadelphia and Chicago Districts noted increases in healthcare costs.
The rate-setting committee of the Federal Reserve, the Federal Open Market Committee, meets later this month. The committee will look at the information in this report and other economic indicators as they consider monetary policy.
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