The Federal Reserve's Beige Book economic summation came out minutes ago, and this compilation of business conditions across the country signaled that the nation's long-lived economic upturn was continuing to press forward at a modest pace. However, the lead bank also cautioned about the auto industry, which continues to trend lower following a multi-year climb.
Specifically, the Fed intoned that economic activity expanded at a modest to moderate pace across the 12 Federal Reserve Districts during July and August. Spending increased in most Districts, with gains reported for non-auto retail sales and tourism. Vehicle sales were generally mixed, although we did note that the major car companies reported further sales slippage in their latest survey.
Meantime, both residential and commercial construction rose slightly during the time period that was measured by the Beige Book, while activity in the energy and natural resources sector was generally positive until the recent shutdowns caused by Hurricane Harvey. At the same time, employment growth slowed in some regions. Overall, though, labor market conditions remained tight.
As to employment, the government did note a slowing in job creation in August, while wage gains moderated last month to a major extent. Also, prices rose modestly, on balance. Finally, the Fed's report also indicated that the aforementioned hurricane created broad disruptions to economic activity along the Gulf Coast.
On the whole, this report was as expected, and the stock market, up solidly before the 2:00 PM (EDT) issuance, continued to track higher, aided by a short-term agreement on raising the debt ceiling. As before, we think the Fed's next meeting, set for September 19th and 20th, will result in no change in interest rate levels.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
