Federal Reserve Beige Book Released

The Federal Reserve Beige Book reported that while economic activity remains at a low level, economic conditions have shown modest improvement and those improvements are more geographically spread out than in the January report.

Consumer spending was slightly higher during the last holiday season than a year earlier. Consumers were described as cautious, price sensitive, and focused on necessities, but were sometimes willing to spend on discretionary purchases. Retail inventory levels remain very lean.

Manufacturing activity has increased or held steady since the last report. Manufacturers are more optimistic about the near-term, but their spending plans remain cautious.

Although some hiring was reported, labor market conditions remained generally soft.

Toward the end of 2009, home sales increased, especially for lower-priced homes. However, home prices appeared to have changed little since the last Beige Book, and residential construction remained at low levels. Commercial real estate was still weak with rising vacancy rates and falling rents.

Loan demand continued to decline or remained weak, as credit quality continued to deteriorate. In general, there was an underutilization of lines of credit, especially commercial credit.

10.03.03 (Source: Federal Reserve)