Economic activity expanded across most of the twelve Federal Reserve Districts over the late August to early October period, according to the just-released Federal Reserve Beige Book. Most Federal Reserve Districts reported “modest” or “moderate” expansion; however, the New York District reported no change in activity.
Banking conditions remained favorable, despite seasonal softening in some lending categories. Competition and credit quality for borrowers remained strong across the Districts. Several Districts noted that delinquency rates remained low or declined since the last report.
Consumer spending was mixed this period. The near-term outlook in the Boston, Philadelphia, Richmond, Atlanta and St. Louis Districts was for modest growth, while the Cleveland and Kansas City Districts anticipated flat sales. Several Districts noted the effects of unseasonably warm weather on sales of cold-weather apparel and of the strong dollar on spending by international customers.
Agricultural conditions were once again mixed amid strong production and low prices. Contacts in the Kansas City District noted that weak farm income was affecting borrower liquidity, and farmers in the Dallas District expressed concerned about their ability to get financing for the next year.
Employment expanded at a modest pace, as labor market conditions remained tight. Hiring was strong in the Richmond, Chicago, St. Louis and San Francisco Districts, while manufacturing layoffs were noted in the New York District. Contacts noted difficulty hiring for a wide range of positions, including manufacturing, health care, and construction.