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Beige Book sees slow growth in most regions
Labor markets remain tight, Federal Reserve's report says
By Rex Nutting, MarketWatch
Last update: 3:06 p.m. EST Jan. 16, 2008Print E-mail RSS Disable Live Quotes
WASHINGTON (MarketWatch) -- The U.S. economy grew at a modest pace in most regions of the nation in late November and December, the Federal Reserve reported Wednesday.
In its Beige Book report on the economy, the Fed noted that labor markets remain tight in most areas despite the sharp rise in the unemployment rate to 5% reported by the Labor Department in December.
On balance, the Beige Book presents a slightly more upbeat view of the economy than most other recent reports have, particularly on the labor markets. There is little in the report that indicates an urgent need for aggressive Fed action to lower interest rates, as analysts and markets now expect.
"Economic activity increased modestly during the survey period of mid-November through December, but at a slower pace compared with the previous survey," the Beige Book reported. Of 12 Fed banking districts, five reported slow or slowing activity, five reported modest or slightly increasing activity, and two said conditions were mixed. Read the full report.
"The Beige Book paints a slightly different view of the economy than some of the data," wrote Drew Matus, an economist for Lehman Bros. "The report does not indicate a collapse in consumption," nor was it consistent with the decline in exports reported by the Institute for Supply Management, he said.
The statement that labor markets were tight was in "stark contrast" to the weak December payrolls report, Matus said, suggesting either an upward revision to December's figures or a bounce back in hiring in January.
Industry breakdown
Retail sales were said to be disappointing and housing markets remained "quite weak" in all districts.
Manufacturing was mixed, with housing-related industries and autos weak, while exports were growing.
Banks tightened their credit standards and loan demand slowed.
Higher prices abounded for energy, food, metals and petrochemicals. Import prices of goods from Europe and Japan were said to be rising because of the lower value of the dollar.
Labor markets were said to be "relatively tight overall," with wage increases described as moderate.
"Robust demand" was reported for many nonfinancial services, including health-care, hospitality, legal and insurance.
The Beige Book was prepared by the Atlanta Fed based on thousands of contacts in business throughout the nation. The Beige Book does not represent the views of policymakers on the Federal Open Market Committee, and in fact is prepared for their information at the policy meeting scheduled for Jan. 29 and 30.
Labor markets remain tight, Federal Reserve's report says
By Rex Nutting, MarketWatch
Last update: 3:06 p.m. EST Jan. 16, 2008Print E-mail RSS Disable Live Quotes
WASHINGTON (MarketWatch) -- The U.S. economy grew at a modest pace in most regions of the nation in late November and December, the Federal Reserve reported Wednesday.
In its Beige Book report on the economy, the Fed noted that labor markets remain tight in most areas despite the sharp rise in the unemployment rate to 5% reported by the Labor Department in December.
On balance, the Beige Book presents a slightly more upbeat view of the economy than most other recent reports have, particularly on the labor markets. There is little in the report that indicates an urgent need for aggressive Fed action to lower interest rates, as analysts and markets now expect.
"Economic activity increased modestly during the survey period of mid-November through December, but at a slower pace compared with the previous survey," the Beige Book reported. Of 12 Fed banking districts, five reported slow or slowing activity, five reported modest or slightly increasing activity, and two said conditions were mixed. Read the full report.
"The Beige Book paints a slightly different view of the economy than some of the data," wrote Drew Matus, an economist for Lehman Bros. "The report does not indicate a collapse in consumption," nor was it consistent with the decline in exports reported by the Institute for Supply Management, he said.
The statement that labor markets were tight was in "stark contrast" to the weak December payrolls report, Matus said, suggesting either an upward revision to December's figures or a bounce back in hiring in January.
Industry breakdown
Retail sales were said to be disappointing and housing markets remained "quite weak" in all districts.
Manufacturing was mixed, with housing-related industries and autos weak, while exports were growing.
Banks tightened their credit standards and loan demand slowed.
Higher prices abounded for energy, food, metals and petrochemicals. Import prices of goods from Europe and Japan were said to be rising because of the lower value of the dollar.
Labor markets were said to be "relatively tight overall," with wage increases described as moderate.
"Robust demand" was reported for many nonfinancial services, including health-care, hospitality, legal and insurance.
The Beige Book was prepared by the Atlanta Fed based on thousands of contacts in business throughout the nation. The Beige Book does not represent the views of policymakers on the Federal Open Market Committee, and in fact is prepared for their information at the policy meeting scheduled for Jan. 29 and 30.