Economic activity rose slightly in most of the 12 Federal Reserve districts since October, with business contacts expressing optimism that demand will rise in coming months, the Fed said in its eighth and final Beige Book report of the year. Demand for mortgages was low overall, although reports on recent changes in home loan demand were mixed due to volatility in rates. Commercial real estate lending was also subdued. Still, contacts generally reported financing remained available, according to the report.
Prices rose only at a modest pace across Fed districts. Both consumer-oriented and business-oriented contacts reported greater difficulty passing costs on to customers, the Fed reported. Input prices were said to be rising faster than selling prices for most businesses, resulting in declining profit margins. Although input prices rose generally, contacts in several districts noted declines in certain raw materials and non-labor costs. Rising insurance prices were again reported widely as significant cost pressures for many businesses.
