The Beige Book, which provides an in-depth analysis of the nation's economic conditions, was released within the past hour and it detailed that the business expansion was still in place, with slight-to-moderate growth generally the rule. Overall, conditions were as they were at the time of our last Beige Book report six weeks ago, though some Districts reported a little strengthening.
The Beige Book is used by the Federal Reserve in formulating its economic and interest rate policies. The next FOMC meeting is to take place on April 30th and May 1st, at which time we expect no interest rate adjustment. In fact, our sense is that the Fed will hold rates at their current levels for much of this year.
Breaking the report down, we see that comments on consumer spending were mixed, but suggested sluggish sales for both general retailers and auto dealers. Reports on tourism were more upbeat; indications on loan demand were mixed; but issuances on the manufacturing sector were mostly favorable.
Further employment continued to increase nationwide; labor conditions were tight; and wage pressures were being seen, with many firms offering perks to attract workers. On balance, there was little in the Beige Book to excite or unnerve investors, and the stock market, off modestly before the report's release, maintained its small deficit.
Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
