Wednesday, December 3, 2008

The Beige Book Summary - December 3, 2008

Here is a summary of today's Beige Book published eight times per year by the Federal Reserve Board. The Beige Book is divided into sections: Consumer Spending and Tourism, Services, Manufacturing, Real Estate and Construction, Spending and Finance, Agriculture and Natural Resources, Labor Markets and Prices. The Beige Book also analyzes all Districts of the country in detail.

It was hard to find the bright, positive spots, but here they are:

1. Wage and price pressures are easing.
Wage pressures were largely subdued. District reports characterized price pressures as easing in light of some decreases in retail prices and declines in input prices, particularly energy, fuel, and many raw materials and food products...In San Francisco, the region's few open positions have been attracting large numbers of applicants, thereby alleviating upward wage pressures.

2.Discount stores reported stronger sales volumes than department stores.

3. Kansas City noted in increase in demand for used cars.

4. Lower gasoline prices are helping some ski businesses... reservations at a ski resort in the Richmond District were somewhat stronger for the Thanksgiving and Christmas holidays, and some tourism businesses in the Minneapolis District were cautiously optimistic for the winter season in part due to lower gasoline prices.

5. Lower gas prices are also, in general, helping stabilize retail inventories. Inventory levels were relatively stable, as many stores anticipated the recent slowdown in sales.

6. In general services demand is deteriorating, with exceptions. Boston reported mixed conditions for information technology services, ranging from declines of 10 percent to gains of 25 percent. Minneapolis and Dallas reported growing demand for bankruptcy services, and Richmond noted that telecommunications and CPA firms were facing strong demand.

7. Boston, Chicago, St. Louis and San Francisco showed increased demand for aerospace manufacturers and St. Louis, Dallas and San Francisco reported increases in food processing.

8. Most of the real estate news is gloomy, with the more bullish news that there is relatively stronger demand for lower- and middle-priced "starter homes."

So there it is, wage and price pressures are easing or leveling off. Discount and dollar stores and food processors and CPA firms are getting business. Lower gas prices are helping all around.

At least there is a little encouraging news.

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