Beige Book Saw "Moderate" Expansion Despite "Harsh Weather", Ongoing Obamacare Concerns

Tyler Durden's picture

The Beige Book may well be renamed the Boring Book due to the uniformity of its monthly pronouncements, and this month was no different. Here is the bottom line: "Reports from the twelve Federal Reserve Districts suggest economic activity continued to expand across most regions and sectors from late November through the end of the year. Nine Districts indicated the local economy was expanding at a moderate pace; among these, the Atlanta and Chicago Districts saw conditions improve compared with the previous reporting period. Boston and Philadelphia cited modest growth, while Kansas City reported the economy held steady in December. The economic outlook is positive in most Districts, with some reports citing expectations of “more of the same” and some expecting a pickup in growth." Still, a few things stands out in a report that saw moderate expansion in the economy across most of the US:

  • the Fed said most districts reported increases in home sales... except we assume for San Francisco where home sales plunged to 6 year low,
  • the Fed sees "very few reports of staff cuts of plant closings"... which we guess ignores the December jobs reports where the least jobs were added since January 2011,
  • the Fed said nine districts reported an increase in retail spending... which is curious considering retail traffic plunged and the holiday spending season was the worst since 2009,
  • the Fed said almost half of district reported prices were stable... which probably means the Fed's inflation benchmark is now well below 2%
  • and Finally, the Fed said eight district reported upward movement in wages...  which also is confusing considering real disposable income per capita just dropped into the negative.

Oh well: we suppose we will take the Fed's word for it.

  • More interesting were the Fed's prop mentions of cold weather and Obamacare. Here they are:
  • Richmond noted a general slowdown in retail spending in recent weeks and the Kansas City District cited lower than expected holiday sales, which retailers there attributed to a shorter selling season and harsh weather conditions.
  • Apparel sales were reportedly strong in Boston and Richmond, while Philadelphia, Cleveland, and Chicago indicated that cold-weather gear and winter items were selling well.
  • Contacts report that sales were hampered by harsh weather in late November into early December across much of New York State
  • In some regions of the [Cleveland] District, retailers experienced a tapering off as December progressed. They attributed the decline in part to persistently poor weather conditions.
  • A few sod and seed companies [in the Richmond district] reported a decline as a result of poor weather conditions.
  • Delays in holiday shipments to consumers were reportedly due to the shortened shopping season, higher than expected on-line sales, adverse weather conditions
  • [In Chicago] severe winter weather, while reducing store traffic in some locations, spurred sales of winter-related items
  • [In Kansas City] district retailers had expected higher levels and attributed the lower than expected sales to a shorter and slower holiday shopping season, and harsh weather conditions.
  • Some contacts cited poor weather, and continued fiscal and regulatory uncertainty as reasons for the December slowdown.
  • [In Dallas] construction-related manufacturers reported slow demand in early December due to poor weather, but business bounced back soon after.

And yet there was an increase in retail spending? Good to know.

As for Obamacare:

  • In regard to hiring and capital expenditure plans, firms continued to expand cautiously and will do so until the pace of growth strengthens and exhibits sustainability; in addition, they face ongoing uncertainty from implementation of the Affordable Care Act.
  • Hiring in the District continued to improve, despite lingering concerns about costs related to the Affordable Care Act and difficulty finding highly skilled workers
  • Demand was generally soft at hospitals and other healthcare organizations, and administrators reported that they expect decreasing utilization along with declining Medicaid and Medicare reimbursement under the Affordable Care Act.
  • Employers continued to express concern about potential cost increases related to the Affordable Care Act.
  • Outlooks were positive for the first part of 2014, but some contacts remained concerned about the impact of the Affordable Care Act on business.

In other words, no change.

Full Beige Book can be found here

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newsguy68's picture

News You Need To Cover

Wells Fargo Now Charging $5.00 For Deposits

eclectic syncretist's picture

When one compares the real estate market findings reported in the Beige book to the plunge in mortgage originations reported by WFC and BAC it's obvious that one of them is full of crap, because they're painting two entirely different pictures.  In another instance, the Fed Beige book reports that real estate in San Francisco is doing great:

"Real Estate and Construction
Demand for residential real estate climbed further, and commercial real estate activity improved. Home prices increased further across most of the District."

They must not read Zero Hedge.


ebworthen's picture

At some point in the future the value of these FED Beige Book releases will be that of the Titanic Log Book.

El Vaquero's picture

It's like they learned that scraping the side of the hull against the iceberg will lead to sinking and have adjusted their strategy. 


"Sir!  Iceberg dead ahead!"

"Well, don't try to avoid it, you'll just tear a hole in the side.  Full speed ahead!"

"Yessir!  RAMMING SPEED!" 


Headbanger's picture

Actually.. The Titanic would have survived if it DID ram the ice berg dead on the bow cause only two forward compartments would have flooded instead of the five that did from the lengthy gash it got trying to steer away from it!


ejmoosa's picture

I'd love to see the beige book from one year ago side by side with this one....

ejmoosa's picture

Nevermind, I  just read it.  Things seemed to be on the upswing a year ago as well....

El Vaquero's picture


Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled.

Motorhead's picture

Despite the "harsh weather", huh?  That might be a contrarian play.

101 years and counting's picture

holiday sales down because of a shorter period?  i love that one.  sorry kids, santa didnt bring you the talking elmo because toys r us was only open 29 straight days instead of 31 last year......

moonman's picture

Shot coffee out of my nose on that one thanks


Headbanger's picture

Dude,  Wrap your keyboard and cover your screen in plastic wrap like I did for such reactions while drinking coffee reading these posts!

Then there's the "coffee through the nostrils proof poncho" I wear as well.

Hope this helps.

Dr. Engali's picture

Why don't we call social security Roosevelt care, or why don't we call medicare and medicaid Johnson care?....just curious.

AynRandFan's picture

Because they didn't win the Nobel Peace prize just for being half black.  That'd be my guess.

29.5 hours's picture



Actually, if you will remember carefully, Obama won that prize mostly for not being Bush. I think the blush is off that particular rose now...

sawman's picture

Lying mother f******. Seriously, there are still people out there making investment decisions on any of this bullshit?

Dr. Engali's picture

I'll give you a piece of investment advice for free.....BTFD.

glossolalia's picture

I refuse to believe any of this because it doesn't support my preconceived notions.

AynRandFan's picture

Can we drop the pretense now?  I mean it's pretty obvious that the Fed acts with political motivation.  Did we really need QE2 two weeks before the Presidential election?  This is now the financing arm of the utopian party.

29.5 hours's picture



While the FED is busy saving the world on the monetary front, the N.Y. Times just came up with the bestest idea on the social engineering front to get us to save more: the lottery...

Playing the Odds on Saving


frankTHE COIN's picture

One mans Beige is another mans Crash.