Beige Book: Economic Activity Expanding at a Modest to Moderate Pace

Economic activity continued to expand at a modest to moderate pace across eleven Federal Reserve Districts from late November through the first week of January, according to the just-released Federal Reserve Beige Book. Dallas was the sole District to record a robust increase in economic activity. The report was based on information collected through January 8.

Consumer spending increased in most Districts this period, particularly in non-auto retail sales and transportation. Auto sales were mixed. Residential real estate activity remained slow as home inventory levels continue to constrain sales in many areas. Manufacturing and nonfinancial services expanded modestly to moderately in most Districts. Agricultural conditions and prices were mixed as some regions reported modest droughts and continued impact from Hurricane Irma.

Employment was modest on balance, reporting flat to moderate increases in most Districts. Labor markets once again remained tight, and employers in most Districts continued to report greater difficulty attracting and retaining qualified workers. The construction and manufacturing industries in particular noted a worker shortage.

Modest wage growth was seen in most Districts. A few Districts cited wage increases across a broad range of industries and positions. Some Districts expect wages to increase in the coming months. Prices increased modestly to moderately across most Districts. Chicago noted slight increases, while San Francisco reported price inflation was down slightly. Several Districts reported higher manufacturing, construction and transportation input costs. Some Districts reported retailers increased prices modestly.

Read the full Federal Reserve report.