KC Fed Bank; Little Change in Economic Activity for June

The Federal Reserve Bank released its June Beige Book Wednesday, indicating the Kansas City district remained flat in economic growth.

The level of economic activity across Kansas City changed little during June, with a mix in performance across segments, according to the Federal Reserve.

Hiring remained relatively stagnate in June and expected employment levels at most businesses continue a downward path. Furthermore, Kansas City businesses reported relying on natural turnover and attrition to reduce their headcounts, avoiding layoffs.

Spending among consumers grew in June, however, prices were mixed across the regional economy. Following a surge in spending in recent months, the Fed believes the pace of spending growth slowed to a moderate pace in June.

Real estate and construction had several home builders experienced an increase in activity in the past couple of months. Some contacts hinted slowing commercial real estate construction could further boost the supply of housing due to workers being more readily available and lower materials costs, according to the Fed.

Meanwhile, the energy activity in Kansas City decreased significantly as weak oil and gas prices continued to “squeeze” a profit.

Expectations that dry conditions will reduce crop yields pushed several commodity prices higher, but contacts noted that lower production could still limit revenues for many producers.

In terms of agriculture, crop yields for the district are expected to reduce as dry weather conditions further drive up commodity prices with contacts noting lower production could still limit revenues for many producers.

Read the full Federal Reserve Beige Book June 2023 edition, here.

Posted July 13, 2023.