Beige Book Shows Weakening Economic Activity Across All Districts

The Fed released its 'Beige Book', which highlights economic activity among its 12 districts. Here is a summary:

• Overall economic activity continued to weaken across almost all of the Federal Reserve Districts since the previous reporting period. Most Districts noted reduced or low activity across a wide range of industries, although a few Districts noted some exceptions in some sectors
• District reports indicate that retail sales were generally weak, particularly during the holiday season. A majority of Districts noted deep discounting during the holiday sales season. Reports of retail sales during the holiday season were generally negative in most Districts. Retail sales during the holiday season were weak or mostly down in the Boston, New York, Philadelphia, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco Districts. However, some contacts in the Boston and New York Districts noted that sales picked up after the holidays
• Vehicle sales were also weak or down overall in the Districts reporting on them. Manufacturing activity decreased in most Districts. Most Districts reported a general weakening of labor market conditions. Most Districts reported that layoffs continued. Wage pressures remained largely contained, and some Districts reported pay freezes or reductions in compensation
• Lower energy prices were noted in many of the Districts, and, except for the Richmond District, which mentioned higher prices for raw materials, most reporting Districts noted declining input prices. Activity in the energy sector declined in several Districts since the previous report, with a number of Districts linking the decrease to lower energy prices
• Residential real estate activity continued to weaken in nearly all Districts. Boston, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, Kansas City, and Dallas reported that home sales were weak or had declined. Reporting Districts generally saw a decrease in homebuilding. Commercial real estate markets deteriorated in most Districts. Reports about commercial construction activity also were downbeat
• Most Districts that reported on lending activity indicated that it continued to decline or remained weak, and many Districts reported that credit conditions remained tight or tightened further.