Best Beige Book Anecdotes: "It's No Longer Possible To Build A Starter Home For Under $200K In Cleveland," And More

While many, and certainly the FOMC, tends to gloss over the periodic Beige Book report, it does provide a snapshot of the US economy, if not in quantiative terms, then in qualitative anecdotes, some of which can be rather amusing at times.

First, here are the big picture economic assessments of the Nov. 29 Beige Book, which was prepared by the St. Louis Fed based on information collected on or before Nov. 17, 2017. First, on overall economic activity, courtesy of Bloomberg:

  • Retail spending largely flat; outlook for holiday sales generally optimistic
  • Residential real estate activity remained constrained, with most districts reporting little growth in sales or construction
  • All districts reported that manufacturing activity expanded, with most describing growth as moderate
  • Some respondents concerned or uncertain about impact of potential changes to taxes and other policies

Employment and Wages:

  • Reports of tightness in the labor market widespread
  • Wage growth modest or moderate in most districts; increases most notable for professional, technical, and production positions that remain difficult to fill
  • Many districts reported that employers were raising wages and increasing their use of signing bonuses and other nonwage benefits to retain or attract employees


  • Most districts reported modest to moderate growth in selling prices and moderate increases in non-labor input costs
  • Construction-material costs rose in most regions, with many districts reporting increased lumber costs and increases in demand for materials due to hurricane rebuilding efforts
  • Fuel prices rose, with multiple districts reporting upward pressure on oil and natural gas prices

And while the above is nothing that we didn't know, here are some of the more notable anecdotes from the various regional Feds:

  • Boston: Residential contacts expressed concern about the possible impact of the tax reform bill in Congress, which they feared could increase the cost of buying a home and disrupt the housing market
  • New York: Rents across New York City have edged down overall, led by the high end of the market, where landlord concessions have remained steady at high levels
  • Philadelphia: Retailers and banking contacts reported no signs of inflationary pressure, while homebuilders reported increases for various construction materials, including lumber and products containing petroleum
  • Cleveland: One homebuilder reported that he can no longer build a starter home for less than $200,000, given rising input costs
  • Richmond: An IT service provider noted that it was able to raise prices considerably in recent months without losing any customers
  • Atlanta: District contacts noted that Florida tourism activity bounced back after Hurricane Irma with the exception of the Florida Keys
  • Chicago: One contact indicated that machinery exports to Canada were artificially high as stricter regulations on emissions that begin in 2018 pulled sales into late 2017
  • St. Louis: Multiple contacts in Louisville reported rising construction costs, and a Memphis contact noted a significant increase in lumber prices
  • Minneapolis: A rural Wisconsin banker noted that tight labor was pushing up starting wages, but longer-term employees were seeing smaller increases similar to previous years
  • Kansas City: Respondents in the energy industry continued to focus on operating within cash flows, but said private equity capital remained readily available
  • Dallas: Some banks reported that labor was becoming a bigger issue than regulatory compliance; A clothing retailer noted that Houston-area stores benefited from the Astros playoff and World Series excitement, as well as some additional spending by flood victims
  • San Francisco: Contacts in Seattle noted continued strong demand for commercial office space, driven mainly by demand from large technology companies