The U.S. economy is growing, but not quickly enough to revive the job and housing markets.
The U.S. economy continued to grow at a slow to moderate pace in nearly all regions, though real estate activity remain sluggish and hiring was subdued, according to the latest Federal Reserve Beige Book released today.
The economic overview indicates that, while the nation avoided slipping back into recession during October and the first two weeks of November, the U.S. economy hasn’t picked up enough steam to revive the job and housing markets.
The St. Louis district, which includes all of Arkansas and parts of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois, reported a decline in economic activity.
Consumer spending rose modestly overall, and gains in retail sales were reported in most regions, through the growth in retail sales slowed in the Dallas region and declined in the Atlanta and St. Louis regions. Six of the 12 regions expected holiday sales to be flat, while retailers in the Chicago district expected to keep sales steady through “extended promotional periods and heavy discounting.”
Vehicle sales increased in a number of regions, particularly Philadelphia, Cleveland, Richmond, Atlanta, St. Louis and Minneapolis. Chicago reported that vehicle sales increased in October, but the pace of sales slowed in November. Dealers suspected consumers were waiting for end-of-year deals.
The tourism industry showed signs of strength with the New York and Atlanta regions describing tourism in their regions as “robust and strong.” Activity increased in the Minneapolis region and posted moderate improvements in the Richmond region. The Boston Fed reported an increase in overseas and business travel, as well as increased leisure spending by affluent Americans.
Business service activity was flat to higher across the country, while manufacturing grew steadily. All regions – other than St. Louis – reported increases in orders, shipments or production. Plant closures outnumber plant openings or expansions in the St. Louis region.
Bank lending increased slightly and home refinancing grew at a more rapid pace. Agricultural prices showed year-over-year increases and farm income rose. Export demand for U.S. agricultural products remains strong.
The energy and mining sectors provided another economic bright spot. Five regions – Cleveland, Minneapolis, Kansas City, Dallas and San Francisco – saw increases in oil exploration. Cleveland and Dallas also reported increases in shale gas extraction. Minneapolis reported an increase in planned wind and energy projects and continued high levels of mining activity, which was on the increase in San Francisco.
Drags to the economy came from the real estate sector. According to the Fed, the commercial real estate sector remains “lackluster,” while single-family home construction was “weak” and commercial construction was “slow.”
Wages and salaries remained stable across the nation, though hiring was modest and some firms said they were having trouble finding qualified applicants for some of their open positions. Inflation remained “subdued.”