Fed’s Beige Book Shows Economy Slowing Further

This afternoon’s release of the Federal Reserve’s Beige Book showed that the rate of U.S. economic growth continued to slow in eight of the nation’s 12 districts.

Highlights from the Beige Book included:

- Most residential real estate activity was little changed and remained weak, although construction and activity in the residential rental market continued to improve since the previous Beige Book.

- Although most Federal Reserve Districts observed modest hiring increases, labor market conditions remained soft. Wage pressures continued to be subdued for all but a few specific occupations in some Districts.

- Consumer spending increased overall, with modest growth of nonauto retail sales in a majority of Districts. Falling gasoline prices throughout most of this reporting period may have encouraged a pickup in shopping trips and some additional spending since the previous Beige Book. Price pressures from food, energy, cotton, and other supplier inputs continued to squeeze retail margins.

- Auto sales slowed a little since the previous Beige Book, with inventories still lean due to Japanese supply chain disruptions

The broader markets extended their losses following the Beige Book’s release, with the Dow Jones Industrial Average (DJIA) lower by 158.29 points, or 1.3%, at 12,343.01.

Gold futures maintained modest losses near $1,615 per ounce, while silver futures fell to fresh intra-day lows near $40.15 per ounce.