Kansas City economic activity displayed moderately paced expansion in November

Released on Dec. 1, The Beige Book – a report from the Federal Reserve summarizing economic conditions in each Federal Reserve District – shows the Kansas City district performed decently over the course of October and November.

According to the report, the Kansas City economy expanded at a moderate pace through November.

Progress within various sectors were analyzed, such as real estate and construction, banking, energy, and agriculture. Among those things measured were manufacturing, consumer spending, employment and wages, and prices.

Activity at non-durable manufacturing facilities rose and durable goods production remained at high levels, according to the report. A change in approach to supply chain disruptions moved to a strategy of holding larger inventories.

Retail spending continued to grow generally, however consumer spending for events and entertainment businesses dipped, showing a decline in attendance and bookings.

The majority of businesses in the Kansas City district reported raising prices to customers, pushed by elevated labor, material, and transportation costs. According to the report, wage pressures were particularly strong among low-skill and front-line workers. Job gains were broad-based, as demand for workers was driven by strong customer demand as well as a need to alleviate strains on current employees.

In the real estate and construction sector, commercial real estate owners reported declines in vacancy rates as new leasing activity picked up in recent months. However, most respondents continue to expect vacancy rates to rise over the next six months.

Agriculture was among those that emerged particularly strong amid continued strength in commodity prices. “District contacts continued to express concerns about high input prices, yet farm income and credit conditions continued to improve and were expected to remain strong in the coming months,” the report read.