Beige Book: Labor Market and Consumer Spending Improve

Economic ­­­activity expanded across the twelve Federal Reserve Districts, according to the April 2016 edition of the Federal Reserve Beige Book. Most Districts reported that growth was in the moderate-to-modest range, and expect similar growth going forward.

Labor market conditions strengthened between February and March. Most Districts reported job gains with only the Cleveland District reporting declines. Service industry employment rose in the Boston, New York, Philadelphia, Richmond, St. Louis and Dallas Districts. Several Districts reported issues filling jobs in low and high-skilled occupations, and wages increased in all but the Atlanta District.

Banking conditions remained positive, as credit conditions improved in most Districts. The lending environment remained competitive, and contacts in one District said that competition for borrowers was holding down profit margins. Commercial real estate lending grew in the majority of Districts, while auto loan demand picked up in the Chicago and Philadelphia Districts.

Consumer spending picked up in most regions, and retailers expressed optimism for the remainder of the year. Retailers in several Districts continued promotions and generous discounts. However, contacts in the Chicago area were disappointed that low gas prices and tighter labor markets did not provide a boost to sales.

Manufacturing activity increased in most Districts, with moderate growth in the Richmond and Chicago regions, and modest growth in the Philadelphia, St. Louis and San Francisco areas. Only the Cleveland and Kansas City Districts reported declines.

Read the Fed release.