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Beige Book Update

Summary of Commentary on Current Economic Conditions

Yesterday the Federal Reserve Bank published the latest edition of the Beige Book, a summary of anecdotal information about economic conditions across the country based on reports from bank and branch directors and interviews with key business contacts, economists, market experts, and other sources.

The report indicates continued general economic growth as moderate in New York, Cleveland, Chicago, Minneapolis, Dallas, and San Francisco Districts; modest in Philadelphia, Atlanta, St. Louis, and Kansas City; and strengthening in Boston and Richmond. Remaining Districts reported optimism in various sectors.

Shortages of skilled labor included:

  • Chicago - Manufacturing, construction, transportation, IT, and healthcare
  • New York, Cleveland, and Atlanta - Qualified drivers for the trucking industry
  • Cleveland, Richmond, and Atlanta - Various types of transportation
  • Boston - Skilled information technology workers
  • Atlanta - Construction workers

Real Estate

  • Barely half of the Districts reported stable or growing residential real estate activity related to the construction of new homes and sales of existing houses.
  • New construction and existing home sales generally grew modestly; market conditions tended to vary by metropolitan area and by neighborhood within metropolitan areas.
  • Boston, New York, and Dallas reported high levels of ongoing multifamily construction projects.
  • Chicago reported a moderate pace of growth, and San Francisco noted a pickup in activity.

Commercial Construction

  • A little over half of the Districts reported some degree of growth in nonresidential real estate activity, with increased construction, leasing, or both tied to steady or falling vacancy rates and to rent increases.
  • None of the Districts reported a decline in overall activity, although New York and St. Louis described activity as mixed.
  • In addition to traditional office space, certain Districts reported increased demand for specific projects:
    • Boston noted demand for construction in the hospitality sector,
    • Philadelphia cited industrial and warehouse projects,
    • Richmond noted distribution centers, and
    • St. Louis reported new retail and mixed-use projects as well as new industrial facility construction.
    • San Francisco cited increased building supply prices

Banking and Financial Services

  • Overall, banking conditions improved from the previous reporting period.
  • Loan volumes increased in nearly all reporting Districts:
    • Moderate gains in the San Francisco District
    • Slight to modest gains in Chicago, Philadelphia, St. Louis, and Dallas
    • Kansas City reported steady demand, while Richmond New York and Cleveland reported a net increase
  • Residential Lending
  • Demand was generally less robust
  • Growth - Philadelphia, Richmond, Chicago, and Dallas Districts reported typically slight growth
  • Slight decline - New York, Cleveland, St. Louis, and Kansas City reported no change or slight decreases
  • Commercial and industrial lending:
    • Increasing in the New York, Cleveland, Richmond, Chicago, St. Louis, and Dallas
    • Slight to moderate growth in the New York, Cleveland, Richmond, Chicago, and San Francisco Districts
    • Philadelphia and Dallas reported no change
    • Kansas City reported a slight decline
  • Credit Quality
  • Philadelphia, Dallas, and San Francisco Districts reported that credit quality improved
  • New York and Cleveland stated that delinquency rates fell across all loan categories
  • Most Districts reported heated competition for high quality credit clients

Non-Financial Services

  • Activity in the nonfinancial services sector continued to grow across all Districts.
  • New York, Philadelphia, and San Francisco reported moderate growth, with moderate growth reported in Richmond, St. Louis, and Dallas. Kansas City reported stable sales growth for professional and high-tech services firms, and Dallas reported mixed demand from staffing firms, noting strength in engineering, information technology, and health-care positions but flat demand for legal services.
  • Transportation services generally noted growth.
  • Cleveland, Atlanta, and Dallas reported moderate to strong freight volumes.
  • Richmond attributed some recent growth in port activity to ships diverted from West Coast ports and to an early arrival of the peak import season.
  • Kansas City transportation firms reported stable sales growth and continued high demand for construction products.
  • Cleveland noted that amid broad-based demand strength, shipments of consumer durables and energy-related commodities and materials stood out.
  • Dallas cited notable growth in shipping volumes for steel.


  • Continued expansion
  • Cleveland, Richmond, and Dallas Districts reported expanded manufacturing activity
  • Boston, Philadelphia, and Chicago reported continued growth
  • New York, Atlanta, Minneapolis, and Kansas City indicated that their growth rates had moderated
  • San Francisco cited mixed reports
  • Growth was reported across a broad base of sectors
  • Philadelphia, Cleveland, Chicago, and Dallas cited increases in auto production or derived demand for steel and other related products
  • San Francisco cited increases in steel capacity utilization over recent months
  • Cleveland cited slightly lower steel shipments because of seasonal factors but indicated underlying demand was strong
  • Construction was cited as a source of increased demand by manufacturing contacts in the Philadelphia, Chicago, Minneapolis, and Kansas City

Labor Markets

  • New York, Cleveland, and Atlanta mentioned driver shortages or difficulties finding qualified drivers, and contacts in Cleveland and Richmond, Atlanta noted concerns about capacity for construction workers along with various types of transportation
  • Boston reported shortages of skilled information technology workers
  • Unspecified shortages were noted in Dallas, Cleveland, Richmond, Philadelphia and San Francisco
  • Wages
  • Wage growth slowed in the manufacturing and service sectors
  • Atlanta, Chicago, Dallas, and San Francisco noted greater wage pressure for jobs in energy, construction, trucking, manufacturing, engineering, information technology, finance, and health care, among others
  • Some general contractors in the Cleveland District reported that they have increased wages and upgraded benefit plans as a means of attracting and retaining skilled workers