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Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report; however, none of the Districts pointed to a distinct shift in the overall pace of growth. The New York, Cleveland, Chicago, Minneapolis, Dallas, and San Francisco Districts characterized their growth rates as moderate; Philadelphia, Atlanta, St. Louis, and Kansas City reported modest growth. Boston reported that business activity appeared to be improving, and Richmond reported further strengthening. Philadelphia, Atlanta, Chicago, Kansas City, and Dallas explicitly reported that contacts in their Districts generally remained optimistic about future growth; most of the other Districts cited various examples of ongoing optimism from specific sectors.
The Federal Reserve makes monetary policy decisions and also provides timely insight on current economic conditions across the United States in the Beige Book report. In addition to broad economic conditions, the report often includes commentary on local employment, temporary help employment, and wage pressures.
Most of the U.S. central bank's 12 districts around the country reported wage pressures remained "fairly modest" and were expected to remain so over the coming months, the Fed said in its Beige Book report of anecdotal information collected from business contacts.In contribution to the overall Beige Book report, the Federal Reserve Bank of Richmond’s regional research unit gathers information from business contacts throughout the District, as well as the Bank’s Board of Directors (including the Baltimore and Charlotte branch offices). The Federal Reserve uses the information contained in this report, along with other indicators, to determine interest rate policy at the FOMC meetings. The Beige Book provides anecdotal information on economic conditions around the United States, and is a marked departure from the dry raw data releases that fill the economic calendar. Though it is lagging, and contains only information on what has already happened in the districts, occasionally the Beige Book will provide evidence that may represent a significant deviation from what a previous indicator has presented. For example, the Employment Report may point to slackness in the labor market, while the Beige Book reports may give anecdotal evidence that certain specific labor markets are tight. The Beige Book also often contains forward-looking comments from the Fed district banks that analysts find useful to forecast changes over the next few quarters. In addition, each Fed region pays particular attention to that region’s major industries. For example, the energy industry is highlighted in the Dallas Fed report, while farming is prominent in the Kansas City Fed report.Agriculture and Natural Resources
Agricultural activity increased modestly since our previous Beige Book report. Fifth District farmers stated that spring planting of cotton, peanuts, and corn was complete. Farm input prices remained unchanged in recent weeks while prices of grains, cotton, and corn declined. While the damage has yet to be assessed, sources in West Virginia expect that recent severe flooding will force farmers in some areas of the state to plow under their crops in the weeks ahead.On Jan. 18, the Board of Governors released the most recent installment of the Beige Book report. With this report comes a new design. What changes can you expect, and why now? To answer these questions, the frequently asked questions page of the Board of Governor’s website explains: When the Beige Book hits the mainstream financial media, it usually appears as a summary of the Summary of the Beige Book Report. For instance, on June 3, 2015, the Wall Street Journal reported that the Beige Book noted slight to moderate growth in all twelve districts, except Dallas, which slowed “slightly.” This is in stark contrast to the final GDP revision for Q1, which indicated an annualized contraction of 0.7%. Construction, loan demand, and the labor market were all improved, slightly but unmistakably. Most of the financial media cover the Beige Book report in a similar manner. These barometers are all important, of course, even though much of this information had previously appeared in other reports. For the Beige Books serves well as corroborating evidence for other more timely reports. However, it is probably the insights we get into the Fed’s methodology and a great host of tiny details that makes the Beige Book most valuable to investors.