Beige Book Preview
The FED’s Beige Book – which analyzes current economic conditions in the Federal Reserve districts – will be released tomorrow at 2:00pm EST.
The previous Beige Book (Jan. 16) revealed sluggish or disappointing retail sales, in line with Dec. and Jan. Retail Sales data from Commerce. Manufacturing activity was mixed across the regions, showing weakness in housing-related sectors and autos but strength in export-related industries. The energy sector stayed strong, with higher rig counts and drilling activity increasing. Demand for transportation services weakened in some areas due to smaller freight volumes.
Tomorrow, look for rising energy, food, and raw materials costs to further pinch producers and consumers, especially in “non-necessity” sectors. All signs continue to point to tight – or tightening – lending conditions against slowing demand for business and mortgage loans.
Residential real estate and construction will continue to post declines, with uneven fallout across the country as overbuilt, high-flying markets fall further than their more stable counterparts. Home prices are also likely to be mixed, with some New England and northern California markets clinging to gains in the wake of plunges in the South and other regions.
Brighter spots are likely to be tourism, driven by the tanking dollar, as well as health care, hospitality, and professional services, which were stronger in the last report.