Beige Book reveals steady December activity in KC

Overall economic activity across the Federal Reserve districts reported economic activity increased modestly since the previous Beige Book period, although conditions remained varied.

Two districts reported little or no change in activity, while two others noted a decline. Reports on consumer spending were mixed and some districts noted declines in retail sales and demand for leisure and hospitality services, largely owing to the recent surge in COVID-19 cases and stricter containment measures.

Banking contacts saw little or no change in loan volumes, with some anticipating stronger demand from borrowers in coming months for new government-backed lending programs. Although the prospect of COVID-19 vaccines has bolstered business optimism for 2021 growth, this has been tempered by concern over the recent virus resurgence and the implications for near-term business conditions.

Kansas City economic activity held steady in December, though conditions varied significantly across industries.

Retail sales rose sharply in the area but overall consumer spending fell due to lower auto, restaurant, tourism and healthcare sales.

Contacts in manufacturing, professional and high-tech services, and energy all reported increased activity levels, while activity slowed in the transportation, wholesale trade, and real estate sectors.