According to the Federal Reserve Bank, activity in the Fed’s Tenth District—Kansas City— was largely flat in recent months, though expectations remained mostly positive. That assessment is from the Federal Reserve’s Beige Book, a report produced eight times a year that gathers anecdotal information on current economic conditions from sources such as, bank and branch managers, market experts and key business contacts. Following is a brief summary of findings:
Consumer Spending: Consumer spending was mostly flat with retail sales declining over the previous survey period but still slightly up compared to a year ago.
Manufacturing: Manufacturing activity declined modestly in late July and August, while most other business activity was mixed. Expectations for future activity, however, remained moderately positive.
Other Business Activity: Professional and high-tech firms reported a moderate increase in sales, with further improvements expected in future months. Transportation and wholesale trade contacts noted a modest decrease in activity, though many transportation firms expected modest sales growth in the next three months.
Real Estate and Construction: Real estate activity increased slightly in August with commercial real estate activity expanding and the residential market slowing. Residential home prices were strongly up over last year, but expectations for the coming months were flat. Sales of low- and medium-priced homes continued to sell better than higher priced homes.
Banking: Most bankers reported steady overall loan demand, stable loan quality, and stable deposit levels.
Energy: District energy activity edged higher from low levels, and the outlook remained slightly positive. There was an uptick in the number of active oil and gas drilling rigs attributed to expectations of higher oil prices. Natural gas prices were mostly unchanged but higher than earlier in the year, driven largely by strong seasonal demand, lower production and inventory additions that were smaller than expected.
Agriculture: Crop prices declined in late July and August. Cattle prices remained well below year ago levels. Agricultural loan delinquency rates remained low but bankers reported weaker loan repayments rates and increased demand for farm loan extensions.
Wages and Prices: Input prices in most sectors increased slightly since the previous survey period, while selling prices were mixed and wages continued to grow modestly. Respondents reported a shortage of commercial drivers, salespeople and skilled technicians.
To view the entire “Beige Book” report, visit the Federal Reserve Bank website.