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Posts Tagged ‘Beige Book’

Beige Book: Wall To Wall Sort Of Has A Silver Lining

October 16, 2006 | 12:01 am | |

The Federal Reserve released their Beige Book last week which provides anecdotal comentary on the state of the economy from the 12 regional banks. While it doesn’t provide stats, in many ways its a better way to understand how elements of the economy are unfolding. Here is the release schedule. It provides a national summary and specific behaviors in the member regions.

Nearly all Districts reported that housing market conditions continued to soften, though several noted that activity increased in some markets. Most Districts reported higher home inventories, and several said that homebuilders and sellers continued to offer incentives to attract buyers. Softer home demand in San Francisco led to layoffs for mortgage brokers and real estate agents. Residential construction remained weak in the St. Louis and Minneapolis Districts except in western North Dakota where residential construction was described as “robust.” New home inventories inched up in the Dallas District despite strong demand in some of its markets and inventories of single family homes and condominiums rose sharply in the Boston District.

New York and St. Louis reported mixed housing activity. On the upside, Manhattan condominium sales showed signs of resilience, and housing sales rose in Memphis, but both Districts noted weakness in most markets. Richmond reported generally weaker housing activity, but also noted increases in some markets. Atlanta said that housing activity rose in its Mississippi Gulf market, and Minneapolis’ Sioux Falls market remained on pace with last year’s record-breaking level. Dallas reported particularly robust home sales in its Houston, Austin and El Paso markets.

The overall message appears to be that the economy is slowing down across the country, including housing. A soft landing appears imminent but no rate cuts are in the near future. The housing slowdown is beginning to cause layoffs. However, not all areas of the country are having the same degree of problems…the proverbial silver lining.

[Disclosure: I am one of interviewees for the New York Region]

Economically Speaking, Its Beige [Matrix]


Something Old & New, Something Bold & Beige

September 7, 2006 | 7:33 am | |

The Federal Reserve released their Beige Book last week which provides anecdotal comentary on the state of the economy from the 12 regional banks. While it doesn’t provide stats, in many ways its a better way to understand how elements of the economy are unfolding. Here is the release schedule. It provides a national summary and specific behaviors in the member regions.

Consumer spending increased slowly in most Districts, weighed down by sluggish sales of vehicles and housing-related goods. While a number of districts noted some bloating in automobile inventories, most non-auto retailers indicated satisfaction with inventory levels. Tourism was generally characterized as steady but relatively strong. Reports on the service sector varied by industry and by district: some found the trucking and information technology industries to be relatively strong, but others provided mixed reports on air transportation and health care. Manufacturing activity continued to expand in all districts, despite pockets of weakness mostly related to autos and residential construction. Reports on real estate and construction were uniformly weak for the residential sector, but fairly widespread strength was recounted in the commercial sector. Financial institutions reported some softening in loan demand, especially for home mortgages, but noted that credit quality was still favorable. Drought-like conditions in much of the nation have hampered crop production and livestock while energy production remained at a high level.

[Disclosure: I am one of interviewees for the New York Region]

Economically Speaking, Its Beige [Matrix]


[Getting Graphic] Beige Book Paints Less Rosey (Blue) Colors For The Economy

July 27, 2006 | 11:13 am | |

Getting Graphic is a semi-sort-of-irregular collection of our favorite BIG real estate-related graphics(s).


Click here for full graphic

The Beige Book was released today from the Federal Reserve, an anecdotal description of the regional economies by the 12 regional banks. The language has been changing since the release of the last few reports. In Jeremy Peter’s Growth Slowing Across the Country, Fed Regional Reports Say [NYT].

Read the report [Federal Reserve].

Although the Beige Book does not report stats (thank goodness, we have enough of those), it is thought to provide some insight as to what the Fed might be thinking. The weakening economic conditions may be a signal that the Fed is nearly done with their systematic rate increase strategy of a 25 basis point increase that started in June 2004.

While the commercial real estate market was reported to be strong across the country, the residential housing market has slowed in nearly all regions with two exceptions: the Dallas region, which reported strong demand and robust construction; the St. Louis region which indicated that the number of sales had not changed.

The weakening residential real estate market is characterized by the declining number of sales, rising inventory and stagnant prices.

[Disclosure: I am one of interviewees for the New York Region]

Economically Speaking, Its Beige [Matrix]


The New Beige: Second Half Of Year Looks Less Rosy

June 15, 2006 | 8:03 am | |

The Federal Reserve released their Beige Book yesterday which is an anecdotal description of the economy from each of the 12 Federal Reserve Districts. Each district interviews industry contacts to arrive at a picture of how things are going.

Here’s a few snipets:

Reports from all twelve Federal Reserve Districts indicate that economic activity continued to expand from mid-April to early June, but there were some signs of deceleration. Activity moderated in four Districts–Atlanta, Kansas City, Richmond, and San Francisco–and the New York District noted increased concern about the outlook for the second half. Seven Districts–Boston, Chicago, Cleveland, Dallas, Minneapolis, New York, and St. Louis–said growth was similar to the pace reported in the last Beige Book. The Philadelphia District, however, reported an improvement in overall economic conditions.

Real estate: Residential down, commercial up
Residential real estate markets continued to cool across much of the country–with most Districts reporting slower homebuilding and sales of existing homes. In contrast, commercial real estate activity continued to strengthen in most Districts. A few reports noted concern about too much building.

Banking and Finance
Overall lending activity was mixed, and credit quality remained good across the nation. The New York, Chicago, and Atlanta Districts reported continued slowing in loan demand, while lending activity levels held steady in the Dallas, Kansas City, St. Louis, and San Francisco Districts. Only the Philadelphia District noted an increase in overall loan volumes over the past six weeks.

New development of residential property is starting to cool because of market forces, although long lead times to bring developments to market will leave many projects in the pipeline for the next two years no matter what happens to mortgage rates and the economy.

All the discussion about inflation in recent days and despite the Fed’s own Beige book, I think we are almost certain to have one more rate increase this June and perhaps either another one at the next FOMC meeting or even a 50 basis point move at the June meeting.

I’d be surprised if they did nothing. The bond market would get very jittery because they are expecting another hike.

Of course, next year, we will all look back and say the Fed went at least one rate hike too far.


Economy Is Slightly Brighter Than Beige

April 27, 2006 | 7:37 am | |

The Federal Reserve [released its Beige Book yesterday [NYT]]((, which provides an anecdotal commentary of economic conditions in each of the Fed’s regional banks.

The economy is expanding modestly but concern is growing that higher energy prices will create more cost pressures but so far, not all businesses have been successfull passing along these costs to their customers.

Meanwhile, the pace of housing market activity was said to be cooling or moderating in many Fed districts, although commercial real estate activity was firming, the Fed’s report said.

In general, year-on-year price appreciation seems to be lower than in quarters past,” the Fed said.

To read the Beige Book (I find it easy to read and informative about regional economic conditions) and conditions in each of the districts (regions) go here [FRB]

_More coverage_
US Fed beige book says economic activity increased [Reuters]
Reading Ben Bernanke For Clues About ‘Near’ [WSJ]
Economically Speaking, Its Beige [Matrix]

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The Monthly Economic See-Saw Continues: Is The R Word Coming?

March 17, 2006 | 12:32 am | |

After reviewing the Fed’s Beige Book this week, which is an anecdotal analysis of the regional economies of each Reserve Bank, the consensus seemed to be that while the economy was improving, the inflation threat was not as bad as originally feared. Still, economists projected at least two more rate hikes [Matrix]

Fast Forward One Day

retail-level inflation was tame while home-building slowed last month, suggesting the Fed may not need to keep hiking rates to cool an over-heated economy and slow sharp price increases.

Treasury prices rallied to a sharply higher close Thursday, as some investors began to back off the view that it is inevitable that the Federal Reserve will keep raising rates at a vigorous pace [FOREX].

Inflation, after posting a big spike at the start of the year, slowed sharply in February, reflecting large declines in gasoline and other fuel prices and in the cost of clothing [BW].

With core inflation as well as overall inflation easing after an energetic start after the new year, now we find ourselves really believing that the Fed only has two more rate increases in store for us and there is a chance that the Fed may hold the federal funds rate at 5 after a 25-basis increase [MW].

I am getting worried that these cooling inflationary results, coupled with a housing related economic slowdown [Big Picture], increasing personal debt [BW] which I don’t think will show in the stats for another quarter or two, could have us fretting about using the “R” word again (Recession) in late 2006 or 2007.


Beige Book Says Goldilocks Is Still Not That Hot

March 16, 2006 | 12:01 am | |

In the Fed’s ‘Beige Book’ Finds Continued Economic Growth [WSJ] article, Economic activity “continued to expand” in most of the U.S. Federal Reserve’s 12 regional districts in January and February and employment strengthened, but labor costs and retail prices remained under control, the Federal Reserve said Wednesday.

The Fed said that business contacts “generally reported ongoing input cost pressures,” with energy prices “mentioned frequently.” However, those pressures didn’t appear to spill over into consumer prices, with the Fed stating that “prices at the retail level increased at only a moderate rate.”

Here’s the Federal Reserve summary [FRB]

The Fed’s rate-setting Federal Open Market Committee is due to meet March 27-28, with analysts expecting new Fed Chairman Ben Bernanke to oversee a quarter-point interest rate rise to 4.75 percent. Job creation and other economic data in recent weeks have been strong and many economists expect rate hikes this month and again in May to keep inflation risks under control [Reuters].

In other words, they painted a picture that the optimal Goldilocks Economy: Not Too Hot, Not Too Cold still seems to be in place. Since the next FOMC meeting at the end of this month may be one of the last two rate increases, which could take pressure off of the housing market by stabilizing mortgage rates. Its still a Catch-22 however, because the expected rate increases will keep inflation in check but inflict more damage on the housing market, which has the potential for more significant economic damage as a result.

It sure seems like the Fed goes two rate increases when it comes to housing. Obviously, thats not their sole focus but in this situation, it would appear to be more important than ever.

Both long term and short term rates have upticked lately tempering volume and has cause a reduction in the number of sales and tempered or caused a decline in housing prices in many markets.

_Of interest_
What is the Beige Book and why is it Beige? Economically Speaking, Its Beige [Matrix]

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Beige Turns Orange: Economy Expands at the end of 2005

January 20, 2006 | 10:15 am | |

Despite signals by the Federal Reserve that we may be nearing the end of their pattern of measured rate increases [Bloomberg], the economy expanded at the end of 2005.

Economic expansion, can prompt the start of inflation, which could mortgage rates to rise. Its not clear yet whether this should be a concern. There has been some speculation that the economic data in November/December is inflationary only because the economy played catch-up after the two hurricanes caused extensive damage to Gulf states.

The Beige Book is an anecdotal analysis of the economy by 12 regions [Fed]

Here’s the national overview for real estate. There is more detailed discussion in each regional analysis:

Many Districts reported moderation in residential real estate activity, although from a high level. Boston, New York, Cleveland, Richmond, Atlanta, Chicago, and Minneapolis reported some cooling in real estate markets. While some of the hottest markets in the San Francisco District have cooled–for example, Southern California and the San Francisco Bay Area–other areas, such as Oregon and especially Hawaii, have reportedly heated up further. Kansas City and Dallas continued to see strong housing markets. And construction and repair work remained brisk in Louisiana and Mississippi.

Conditions in Districts’ commercial real estate markets generally continued to improve. Vacancy rates fell in the San Francisco, Minneapolis, New York, Dallas, Richmond, and Kansas City Districts. Chicago reported a more mixed picture, with some areas of the District expanding but activity in the city of Chicago flat. Largely because of lower vacancy rates, rents rose in San Francisco and New York, while previous concessions were reduced or eliminated in Dallas. New construction activity was reported to be increasing in the San Francisco, Minneapolis, St. Louis, Atlanta, and Cleveland Districts, and many contacts expect this trend to continue in 2006.

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The Economy and Real Estate Shows Their Strength In Beige

December 1, 2005 | 12:01 am | |

The Federal Reserve released their Beige Book today [], an anecdotal description of the US economy broken out by the 12 regions of its member banks and collected before November 21st. The information is based on interviews with businesses and other sources and is not the official view of the economy by the Fed.

View The Beige Book [Fed]

Residential real estate markets generally remained upbeat, but many districts reported slowing activity. Residential mortgage lending was down in several districts, while stronger commercial real estate markets were found by many of the banks

Home sales were reported to have eased off in the Philadelphia, Richmond and Cleveland districts. Housing sales remained fairly strong in New York City, but the New York district reported that sales in New Jersey had moderated and that inventories were high.

Both the Chicago and Atlanta districts reported flat home sales, and excess inventories were noted in the Kansas City district, though sales there were up slightly. St. Louis and Dallas said home sales were strong in most metro areas, and San Francisco said sales continued at a rapid clip.

The upbeat economic news [NYT], including the revision of GDP [Businessweek], is expected to prompt the Fed to continue raising short term rates [MSNBC].

Source: NYT

Note: Miller Samuel provides market feedback to the Fed for the Beige Book.


Beige Book: Despite Storm Of Bad News, Real Estate Economy Remained Generally Strong

October 22, 2005 | 5:14 pm | |

The Federal Reserve released its anecdotal analysis of the overall economy this week [Bloomberg]. It is the first report completed since the double hurricane barrage of bad fortune in September.

The housing market, while remaining ‘generally strong,’ showed more signs of cooling in other areas, the survey said. The New York and Boston districts said homes were sitting on the market longer, while inventories of homes for sale increased in the Chicago and Kansas City regions. Demand for office, retail or industrial real estate increased in all areas, the Fed said.

Residential real estate activity remained generally strong, but reports that demand for homes has eased have become somewhat more common. [Beige Book]

The Fed intends to continue raising short term rates at a “measured pace.” Immediately after the hurricanes, it was generally thought that the Fed may ease in its attempts to reign in inflation as the economy felt the drag of hurricanes. However, this was short lived. Rising wages and gasoline prices continue to raise inflationary concerns.

As a result, mortgage rates have continued to trend upward.

The next Beige Book is scheduled for release on November 30, 2005.

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That 70’s Beige Book: Seems Familiar 35 Years Later

September 17, 2005 | 8:06 pm | |

The national summary from the Federal Reserve Beige Book 35 years ago seems vaguely similar to today except it was known back then as the Red Book and was not released to the public. Perhaps it is akin to reading your horoscope, it always seems to apply to your life.

The most recent Beige Book, released in September, gave a somewhat optimistic view of the US real estate economy with some cooling evident:

Residential real estate was strong, with signs of softening in some markets. Dallas, St. Louis, and San Francisco reported increased activity, with Kansas City, New York, Philadelphia, and Richmond all observing strong sales, but signs of cooling were evident. Atlanta reported sales above last year’s levels in Florida, but demand was beginning to soften. Chicago, Cleveland, Kansas City, Minneapolis, and New York reported residential construction was still strong but down from last year, while St. Louis described it as lagging.


Economically Speaking, Its Beige

August 9, 2005 | 1:01 pm | |

What is the Beige Book and why is it Beige? Prior to 1970 it was red and not intended for public reporting. Perhaps the color was not considered neutral enough for economic reporting – beige seems to be about as neutral as you can get. In 1983, the Beige Book became a public report.

More digging to do on the latter, but here’s the latest…well, not exactly hot off the presses¦Federal Reserve: Beige Book–New York–July 27, 2005

Basically, economic expansion is now more moderate than earlier this year, including retail sales and labor costs and productivity. It is interesting that one of the items that has kept mortgage rates (long term rates) in check for so long has been the fact that productivity has outpaced economic growth. As a result, large corporations have been more likely to refrain from hiring new employees. The limited growth in employment has kept long term rates in check as investors are less concerned about the threat of inflation.

Construction and real estate were robust across the region, but the rate of price increases has slowed. This doesn’t mean prices are falling, it means that the rate of appreciation is slowing.


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