Fed says America stable

The latest Beige Book report from America’s Federal Reserve says economic activity in the 12 districts it surveys continued to stabilise in July and August.

Retail sales remain flat in most districts, although the government’s ‘cash for clunkers’ scheme has boosted sales, traffic and automobile-related production, specifically in Atlanta, Chicago, Minneapolis and Richmond. Consumer prices were described as being steady in most districts.

Chicago, Cleveland, Philadelphia and San Francisco observed that shoppers remain focused on essentials and are refraining from purchasing discretionary and big ticket items.

Several districts remarked that retailers are monitoring their inventories closely and keeping them in line with low sales levels.

Most regions reported some improvement in residential real estate, despite ongoing downward pressure on house prices.

Reports on commercial real estate suggest that the demand for space remains weak and that non-residential construction activity continues to decline.

Conditions in the job market are still tough, although Chicago reported a slight increase in demand for temporary workers.

Reports from the financial sector suggest that lending criteria remains tight, while demand for loans including mortgages is also weak, with the exception of auto loans, for which demand picked up slightly in some districts. Delinquency rates and consumer bankruptcies have risen in several districts.

The manufacturing sector has seen modest improvements throughout most of the districts surveyed, with slight to moderate increases in new orders in several sectors.


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