Reply #46: Beige Book Report [View All]

http://www.federalreserve.gov/fomc/beigebook/2005/20050119/default.htm

Reports from the twelve Federal Reserve districts indicated that economic activity continued to expand from late November through early January. Eleven districts characterized activity as expanding with Atlanta, New York, and Richmond noting that the pace of activity had quickened since their last reports. The Cleveland District was less upbeat, characterizing economic activity in that district as mixed.

Consumer spending was generally higher since the last Beige Book and a number of districts reported that retail sales during the holidays were above year-ago levels. While the pace of spending was sluggish in a number of districts at the beginning of the period, it picked up appreciably by late December. Adding to the strength in household spending was an increase in tourism in several districts. Most districts reported that manufacturing activity firmed and many districts said that businesses planned to increase capital spending in 2005. Although several reports noted some slowing in residential real estate and construction activity, real estate markets remained generally strong. In the financial sector, lending activity was mixed, as modestly higher commercial and industrial lending was tempered by slower residential mortgage lending. Several districts noted that agricultural conditions were favorable and that activity in the energy sector remained strong. Labor markets firmed in a number of districts, but wage pressures generally remained modest. Several districts reported higher prices for building materials and manufacturing inputs, but most reported steady or only slightly higher overall price levels.

Consumer Spending and Tourism
Consumer spending increased in most districts since the last Beige Book report, with only Cleveland, Dallas, and New York reporting that sales were mixed. Boston, Chicago, Dallas, New York, Richmond, and San Francisco said that retail sales were slow in early December but picked up the pace from Christmas through the end of the year. Sales of luxury goods were strong in the Kansas City, Philadelphia, and San Francisco districts, while retailers in the Atlanta, Chicago, and Kansas City districts reported that electronics and jewelry sold well during the holiday season. Boston, Richmond, and San Francisco reported higher sales of building supplies, and Boston, Chicago, and St. Louis noted stronger sales of apparel. Gift cards sold briskly according to the Chicago, Kansas City, Minneapolis, and New York reports. Post-holiday retail inventories were at satisfactory levels in the Kansas City, New York, Philadelphia, and San Francisco districts.

Automobile sales were mixed. Atlanta, Chicago, Cleveland, and Kansas City noted higher sales, but St. Louis and Dallas said new car sales slowed. Atlanta, Philadelphia, and San Francisco noted that sales of foreign cars outperformed domestic makes. Dealers in the Chicago, Dallas, and Philadelphia districts reported that automobile dealers' inventories remained above desired levels.

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