We've all heard the maxim, "Don't judge a book by its cover." In this case, don't judge the importance of the information in this report by the somewhat bland titling. Published prior to each of the Federal Open Market Committee meetings, the Beige Book contains a significant amount of information about the economic conditions in the U.S.
Sources for the economic data in this report are fairly broad. Each of the twelve Federal Reserve Banks across the U.S. gathers data from its district. Interviews are conducted with business leaders. Discussions are held with banking executives. Academics and economists may be consulted. Other sources are tapped to gather relevant economic information.
An overall summary of the data collected from the twelve districts is compiled and released.
The most recent Beige Book was released in late August. Overall, most of the twelve districts and most of the business sectors reported gradually improving economic conditions. At the same time, aggregate retail activity was reported to be up slightly during the past few months.
One of the positive factors noted is the generally improving real estate market. Regional differences exist, but the macro trend is positive. All twelve districts reported improving house prices and new construction.
Consumer spending was up in most districts, as compared to the previous reporting period. Six of the twelve districts reported increased car sales, with three districts indicating car sales were flat as compared to the last report.
Severe drought conditions resulted in mixed agriculture conditions. Most agricultural commodity prices rose during the observation period.
Data reported by the Beige Book is backward looking and can be somewhat anecdotal. Based on the results published in the latest report, the US economy seems to be muddling along. Some signs of improvement are beginning to emerge, but significant domestic and global economic hurdles remain in front of US businesses.
Kirby Brown is the CEO of Beneficial Financial Group in Salt Lake City.
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