The Federal Reserve provided a look at the nation's economy at the turn of the year and indicated that the upturn was proceeding at a modest pace on average across most regions of the country. Better manufacturing metrics, generally decent retailing numbers (with the exception of a disappointing holiday season), and improving employment data underscored the generally decent outlook in place as we begin 2017.
Specifically, labor markets were tightening, with some upward pressure on wages; pricing pressures were intensifying, with all 12 Districts showing some pressures; financial conditions were stable; and firms across the country and industries were said to be optimistic about growth in the new year. In all, conditions seemed to be ripe for another interest rate increase, perhaps as early as later this month.
Checking out the 12 separate Federal Reserve Districts we see that each of them was expanding at a modest to moderate pace, save for New York, which reported steady activity, and Cleveland, which saw just slight gains. On balance, this was a reassuring Beige Book report and suggests that the trio of interest rate increases that the central bank is expected to implement this year will come off as planned.
The stock market, off modestly before the release, continued to trade in a narrow range, with weakness in the Dow, but nominal strength in the S&P 500 Index and the NASDAQ. The lone down note was some expression of uncertainty regarding the pending change of direction in Washington.
At the time of this article's writing the author did not have positions in any of the companies mentioned.
