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WSJ: 12 highlights from Beige Book

2:37 pm ET Jun 4, 2014
Business Cycles
We Read It So You Don’t Have To: 12 Beige Book Gems

The Federal Reserve’s “beige book” report, out Wednesday, provides a snapshot of economic activity across the nation in recent weeks. Based on anecdotes gathered from the central bank’s 12 districts from early April through late May, the Fed concluded that a pick-up in auto sales, tourism and manufacturing were supporting economic growth. Reports collected from regional business contacts also found that some industries have continued to suffer weather-related disruptions, while others said they were having trouble finding qualified workers.

Here are edited excerpts:
1.Mall Drats: One New York retailer said a surge in sales since mid-April corroborates that weather had been a major restraining factor. However, contacts at major malls in upstate New York report that sales were steady to down slightly in April and early May, as cold and rainy spring weather has continued to restrain shopper traffic.
2.Boston Strong: In April, Boston-area hotel occupancy rates were above 90%, which is unusually high, and observers say they expect hotel revenues to exceed those posted for April 2013. Some of the increase was due to business related to the 2014 Marathon, which had almost 36,000 entrants compared to about 17,600 in 2013, which was struck by twin bombings.
3.Revving Up: A Philadelphia-area auto dealer said sales surged with “phenomenal” growth in April after a strong month in March. Auto dealers remain bullish for the rest of 2014.
4.Hot in Construction: Cleveland construction companies said that they are hiring all types of workers–skilled trades, professionals, and back office, but that skilled trade workers are very difficult to find forcing wages higher.
5.Guzzling Almonds: Many Boston-area companies said new products are driving growth. For example, a dairy-products manufacturer forecast that almond milk will generate “significant” growth.
6.Eating Well: San Francisco restaurateurs said that meat and seafood prices have increased significantly. Drought conditions in California and Arizona have led to reduced herd sizes and decreased plantings of annual crops, driving up prices for cattle and vegetables like tomatoes and rice.
7.Shipping Out: Richmond port traffic grew briskly, in part because shipments are being re-routed there from the West Coast because of expected interruptions from union contract negotiations there. Imports and exports of autos remained strong at the Port of Baltimore, and container shipments bounced back after a weaker first quarter.
8.Train Delays: Chicago manufacturers reported lingering shipment delays of goods and raw materials from the harsh winter weather earlier in the year. A steel industry contact noted that the resulting supply-chain disruptions contributed to the increase in steel prices.
9.Capital Gains: In Washington, D.C., the number of tourists had increased in recent weeks, and the re-opening of the Washington Monument in mid-May was well-attended.
10.Bidding Battles: Real-estate agents in upstate New York said a lack of inventory is restraining home sales and that bidding wars are “fairly common” for prime properties. Home builders in the area said they are feeling more confident about the housing recovery but are still “reluctant” to aggressively ramp up new building projects.
11.Texas is Different: In the Dallas area, employment levels held steady or increased at nearly all responding firms and some contacts noted continued difficulty in finding skilled workers. Food, cement, lumber, primary metals, fabricated metals and transportation equipment manufacturers noted continued hiring.
12.Weakness Overseas: Some Boston-area manufacturers expressed concern about their foreign sales. A firm that sells building equipment said “Europe is still a mess.” Two other manufacturers said sales to China had slowed.