This book is produced roughly two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Fed district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. Why Investors Care
Highlights
Today's Federal Reserve Beige Book offers little more than confirmation that the U.S. economy was strong heading into Hurricane Katrina, a fact already widely known that won't have any effect on the financial markets. The report said growth was "widespread" across all sectors of the economy, with wage gains and price gains, excluding energy, no more than "modest." The report noted that the residential market was showing signs of "softening," an interesting observation given concern, voiced two weeks ago by Alan Greenspan, that gains in housing maybe unsustainable. The report also noted that labor markets were tight. Below is a summary:
"Information was gathered before Hurricane Katrina made landfall. Economy activity up except in Boston, where it was mixed. Growth widespread in retail, services, finance, construction, manufacturing, mining, energy and tourism. A few Districts reported softening in residential real estate; commercial real estate stronger in most Districts. Lending activity increased, credit quality stable. Labor markets showed signs of tightening with modest wage increases. Except for energy prices, overall consumer price increases were modest; most Districts reported significantly higher prices for some commodities and energy products."
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