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Fed October Beige Book Released
Beige Book released by FOMC
On "economic improvement" (even the Fed is having a tough day with the spin on this one):
Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered. For example, Dallas cited slight improvements residential real estate and staffing firms, while New York noted gains only in a few sectors (predominantly manufacturing and retail). Retail and manufacturing conditions were mixed in Boston, but some signs of improvement were reported. New York, Philadelphia, Cleveland, and San Francisco cited small pickups in manufacturing activity. In the Kansas City District, an uptick was noted in technology firms, while services firms posted revenue gains in Richmond. However, conditions were referred to as stable or flat for business services and tourism firms in Minneapolis and agriculture in St. Louis and Kansas City.
On CRE:
"The weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all Districts. Banking also faltered in several Districts, with Kansas City and San Francisco noting continued erosion in credit quality (often with more expected in the future). One bright spot in the banking sector was lending to new homebuyers, in response to the first-time homebuyer tax credit. Finally, labor markets were typically characterized as weak or mixed, but with occasional pockets of improvement."
On "inflation"
Districts generally reported little or no increase to either price or wage pressures, but references to downward pressures were occasionally noted. While upward price pressures were generally subdued in most Districts, materials prices increased in Cleveland (mainly for steel) and Kansas City. Manufactured goods prices were flat to up slightly in Boston. Boston reported that in some market segments ?product competition and customer clout are leading to downward pressure on prices.? Minimal wage pressures were noted in Cleveland and Minneapolis.
On consumer spending:
Consumer spending remained weak in most Districts since the last report, although some improvements were noted. Chicago reported a continued decrease but at a slower rate than in the previous reporting period, and retailers maintained low inventories. Richmond reported flat or declining sales; Dallas indicated sales were largely unchanged. However, Dallas reported unexpected weakness at value-based retailers. Sales were mixed, according to Boston, St. Louis, and Kansas City, with Kansas City citing strong sales of cold weather apparel and lower-priced goods. San Francisco remarked that sales were little changed, with the exception of an increase in furniture sales. Although New York observed weak sales in upstate New York, general merchandise retailers in the City were ahead of plan and same-store sales were roughly on par with a year earlier. Boston noted that large-scale retailers had cut inventory due to weak sales. Philadelphia saw a pickup in back-to-school shopping. Cleveland observed that consumers were very price-sensitive and inventories were lean; nonetheless, sales were flat or slightly improved.
On Cash-for-Clunkers:
The ?cash-for-clunkers? program ended in August, leaving depleted inventories and slower sales in its wake. New vehicle sales declined in New York, Philadelphia, Cleveland, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco. However, Chicago reported a pick-up in vehicle sales in early October. Low new-car inventories helped to move used cars in several Districts, although San Francisco commented that the demand for used cars also weakened. New York also reported that automobile dealers saw some improvement in credit conditions for consumers looking to purchase cars.
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There is a reason was it is call BEIGE book...
Oh come on! No one is supposed to actually read these minutes, you're supposed to just read the headlines, like the one from AP: "Fed survey: housing, manufacturing drive recovery". Stop trying to spoil our 1999 party!
And no doubt GS and JPM will gun the market and everyone will think, ah the economy must be improving because the market went up and didn't tank You can fool people into doing things they don't think are right by presenting them with evidence that makes them doubt their own judgement.
According to the stupid saying about markets going up in anticipation of recovery, shouldn't we have staggering recovery now and not some wishy washy, tiny little bits that they had to look under the mattress for?
The recession is over!!!
I like how they try to end every paragraph with the most positive report or spin available, and bury all the dismal stuff in the middle.
One bright spot was lending to first time homeowners, based on a free money drop of 8k per?
we are so f'd.
sorry ghostface, that was supposed to say free-basing, it's all good.
Subsidy always brings about a need for more of the same.
Problem is eventually it must come to an end, and the aftermath (ala C4C) is never pretty. In our case however, it's compounded by the fact that the bill for all these supposed economic cures has to eventually be paid, albeit in death spiral US dollars.
The inability of the political elite to recognize the faltering conditions of the US means that spending at the federal level will continue until a (coming) currency crisis brings it all to a screaching halt. Not that this isn't anything we haven't discussed here before.
Have we already crossed the Rubicon? I believe we have, but we haven't felt the consequences yet....but we will...oh yes, we will.