FOMC Beige Book: The Margin Squeeze Is Everywhere
The key highlights, in which we read that yes, the margin squeeze is here.
- Non-wage input costs increased for manufacturers and retailers in most Districts.
- Retailers in some Districts mentioned they had implemented price increases or were anticipating such action in the next few months
- Manufacturers, in a number of Districts reported having greater ability to pass through higher input costs to customers. (oh really, good luck)
- Most reporting Districts noted continued strong agricultural commodity prices.
- Wage pressures remained minimal across all Districts; although Philadelphia, Dallas, and San Francisco noted that most wage increases were for workers with specialized skills.
And some other highlights,in which we find that things were oddly good despite all the snow scapegoating:
- Homebuilders in Cleveland and Atlanta had limited ability to pass through cost increases to buyers.
- Reports from the twelve Federal Reserve Districts indicated that overall economic activity continued to expand at a modest to moderate pace in January and early February.
- Chicago reported that although there was an increase in activity, it was at a pace not quite as strong as during the previous reporting period.
- Retail sales increased in all Districts, except Richmond and Atlanta, although Boston, New York, Philadelphia, Atlanta, and Kansas City noted that severe snowstorms had a negative impact on merchant activity.
- Some Districts reported a slight increase in the level of residential real estate activity, although all Districts maintained that the overall level of home sales and construction remained low.
- Several Districts indicated improvements in commercial real estate sales and leasing activity, including Boston, Richmond, Chicago, Kansas City, Dallas, and San Francisco.
- Most reports characterized nonresidential construction as weak.
- Changes in loan demand were mixed across Districts, with Richmond, Dallas, and San Francisco experiencing increased loan demand and Kansas City noting a decrease.
- All Districts, except St. Louis, experienced solid growth in manufacturing production, and new orders improved for Philadelphia, Atlanta, Chicago, Kansas City, and San Francisco.
- Most regions observed an increase in nonfinancial services.
Beige Book (link)
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