Beige Book: The Latest Economic Snapshot from the Fed

By at 25 October, 2018, 8:07 am

by Raymond J. Keating-

The Federal Reserve’s latest Beige Book, released on October 24, pointed to continued economic expansion across 12 districts, though growth was slight in the New York and St. Louis districts.

Manufacturing growth was reported as “moderate,” and demand for transportation services was strong, travel and tourism picked up, agriculture was mixed, and consumer spending rose at a “moderate pace.” Employment was up “modestly or moderately across most of the nation.” Prices also were noted as “growing at a modest to moderate pace.”

According to responses from key business contacts, economists, market experts, and other sources, economic growth was strongest in the Dallas district. The Fed summed up:

“Economic activity expanded at a solid pace. Healthy growth continued in manufacturing, retail and nonfinancial services. Loan demand increased further while home sales were flat. Capacity constraints restrained growth in the energy sector. Widespread labor shortages pushed up wages while tariffs drove up input costs. Hiring continued, and outlooks remained quite optimistic.”

Three key problems cutting across much of the nation were highlighted: “several Districts indicated that firms faced rising materials and shipping costs, uncertainties over the trade environment, and/or difficulties finding qualified workers.”

Of course, businesses are not standing still. For example, in reaction to a tightening labor market, the Fed reported, “Some businesses implemented non-wage strategies to recruit and retain workers, such as giving signing bonuses, offering flexible work schedules, and increasing vacation allowances.”

Further changes on the policy front would help. Building on the ongoing successes regarding tax and regulatory relief by rolling back tariffs and protectionist threats, and moving forward with free trade efforts that roll back governmental barriers and interference (such as tariffs, quotas, and assorted regulatory measures) to trade would be positive, as would immigration reforms that actually serve the needs of businesses, consumers and our economy.

As always, free markets and free enterprise work best.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


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