Beige Book Summary: 11 Districts See Modest To Moderate Growth-Text>

--Report Prepared by the St. Louis Federal Reserve Bank

--Responses Collected Before Nov. 17

     WASHINGTON (MNI) - The following is an excerpt from the summary of 

the Federal Reserve's report on Current Economic Conditions, known as 

The Beige Book, released Wednesday: 

     Overall Economic Activity 

     Economic activity continued to increase at a modest to moderate 

pace in October and mid-November, according to anecdotal reports from 

contacts across the 12 Federal Reserve Districts. There was a slight 

improvement in the outlook among contacts in reporting Districts. 

Pre-holiday reports of consumer spending on retail and autos were mixed 

but largely flat; still, the outlook for holiday sales was generally 

optimistic. Many Districts highlighted growth in the transpor-tation 

sector, although the New York District reported a slight softening and 

the San Francisco District noted that North-ern California wildfires 

temporarily reduced shipping volumes. Residential real estate activity 

remained constrained, with most Districts reporting little growth in 

sales or construction. By contrast, nonresidential activity was 

consistent with previous reports of slight growth. Loan demand was 

steady to moderately stronger. All Districts reported that 

manufac-turing activity expanded during the reporting period, with most 

describing growth as moderate. Among reporting Dis-tricts, manufacturing 

contacts predominantly expected activity to continue to pick up, 

although the Philadelphia and St. Louis Districts noted signs of a 

slowdown.   

     Employment and Wages 

     Employment growth has increased since the previous report, with 

most Districts characterizing growth as modest to moderate. Reports of 

tightness in the labor market were widespread. Most Districts reported 

employers were having difficulties finding qualified workers across 

various skill levels, and several Districts reported that an inability 

to find workers with the required skills was a key factor restraining 

hiring plans. Wage growth was modest or moderate in most Districts. Wage 

increases were most notable for professional, technical, and production 

positions that remain difficult to fill. Many Districts reported that 

employers were raising wages as well as increasing their use of signing 

bonuses and other nonwage benefits to retain or attract employees. 

     Prices 

     Price pressures have strengthened since the last report. Most 

Districts reported modest to moderate growth in selling prices and 

moderate increases in non-labor input costs. In particular, 

construction-material costs rose in most regions, with many Districts 

citing increased lumber costs and/or increases in demand for materials 

due to hurricane rebuilding efforts. Residential real estate prices 

generally increased as well. There were also reports of increases in 

costs in the transportation sector. Additionally, several Districts 

noted input cost increases in manufacturing. In many cases, these 

increases in transportation and manufacturing were passed through to 

consumers. Fuel prices also rose, with multiple Districts reporting 

upward pressure on oil and natural gas prices. However, agricultural 

price pressures remain mixed. 

--MNI Washington Bureau;tel: +1 202 371-2121                       

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