Economic activity expanded across most of the twelve Federal Reserve Districts according to the November edition of the Federal Reserve Beige Book. Seven districts reported modest growth, while conditions leveled off in the New York District.
Labor markets tightened modestly since the previous report. The Atlanta, Kansas City and Dallas districts reported a slight increase in hiring, while the remaining districts characterized their increase as modest to moderate. However, many of the newly created positions were characterized as temporary or entry-level, and were being filled by staffing firms.
Manufacturing reports were mixed in recent weeks, with firms in several districts reporting constrained demand due to a combination of the strong dollar, and low commodity prices. The Boston and St. Louis districts reported moderate growth, while New York, Philadelphia and Minneapolis reported a decline in manufacturing activity. Food manufacturers in the Richmond district reported an increase in new orders. In Chicago, the auto industry experienced gains and plan to expand capacity. Demand for high tech manufacturing also picked up slightly.
Banking conditions were positive as loan demand increased during the period. The rise in demand was slight to modest in the New York, Cleveland, Richmond and Dallas districts, while demand was moderate in the Philadelphia and San Francisco regions. Several districts reported a rise in mortgage lending, as well as an increase in demand for home equity loans. Some community banks in Atlanta stated that they found difficulty competing with loan structures and terms offered by larger institutions, while some banks in the St. Louis region reported a decline in consumer borrowing due to nonbank competition.
Consumer spending increased in nearly all districts, but to varying degrees. Growth in the Philadelphia, Cleveland, Chicago and St. Louis districts was modest, while spending in the New York District was described as sluggish. Reports were mixed in the Boston, Richmond and Dallas districts, while spending declined in the Kansas City region. Vehicle sales continued to rise however, with dealerships crediting low gas prices for boosting sales.
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