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

--Report Prepared by the San Francisco Federal Reserve Bank

     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 expanded at a modest to moderate pace across the 

12 Federal Reserve Districts in January and February. Consumer spending 

was mixed, as non-auto retail sales increased in just over half of the 

Districts while auto sales declined or were flat in every District. 

Tourism activity was broadly solid, with Atlanta and Richmond recording 

robust growth in this sector. On balance, Districts reported modest 

growth in home sales and construction, with the latter constrained by 

shortages of labor and materials. Conditions in the nonresidential real 

estate market improved moderately since the previous report, with robust 

construction activity noted in three Districts. Commercial rents in and 

around New York City were up significantly, according to contacts in the 

area. Increases in production were broad based across manufacturing 

sectors, with all but one District noting at least modest growth in 

activity. Loan volumes were generally flat, with a handful of Districts 

noting a modest decrease in delinquency rates. Among reporting 

Districts, agricultural sector activity was mixed but flat overall. 

Contacts in natural resource sectors saw modestly improving industry 

conditions, except in the Minneapolis District, where energy and mining 

activity was robust. 

Employment and Wages

     On balance, employment grew at a moderate pace since the previous 

report. Across the country, contacts observed persistent labor market 

tightness and brisk demand for qualified workers, as well as increased 

activity at staffing placement services. Several Districts reported 

continued worker shortages across most sectors, with contacts often 

mentioning shortages in the construction, information technology, and 

manufacturing sectors. In many Districts, wage growth picked up to a 

moderate pace. Most Districts saw employers raise wages and expand 

benefit packages in response to tight labor market conditions. Contacts 

in a few Districts conveyed reports of modest increases in compensation 

following passage of the Tax Cuts and Jobs Act. 

Prices 

     Prices increased in all Districts, and most reports noted moderate 

inflation. Four Districts saw a marked increase in steel prices, due in 

part to a decline in foreign competition. Price growth for building 

materials such as lumber picked up, stemming from an uptick in 

construction activity. Several Districts reported moderate increases in 

broad transportation costs, caused primarily by higher fuel costs that 

boosted freight rates. Home and commercial lease prices rose across most 

of the country.     

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

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