FED: Beige Book: Activity Still Sluggish, No Game-Changer For Fed (1/2)
The Fed's October Beige Book overall doesn't appear to change the narrative of slower economic growth depicted in September's collection of regional anecdotes, but job gains appear to have been marginally firmer while inflation pressures may have been marginally softer. The labor market element alone probably makes this Beige Book slightly hawkish in terms of the FOMC's November rate decision outlook, but with few dramatic changes over the preceding 6 weeks it is unlikely to be a game-changer compared with the unexpectedly weak September edition.
Economic activity was "little changed in nearly all Districts since early September, though two Districts reported modest growth".
- "Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives."
- Hurricanes appeared to have a limited impact, mostly confined to agriculture, while the Richmond Fed reported "parts of our District were heavily affected by Hurricane Helene; the full impacts of the loss of life and property were still being assessed." The inputs for the Beige Book came on or before Oct 11.
Going district by district, September's Beige book saw flatlining or declining growth in 9 of 12 districts - that remains the same proportion though the composition has changed slightly vs September as noted:
- Declining Activity: Philadelphia, Atlanta, Minneapolis (just 3 vs 5 "declining" in the previous edition)
- Flat: Boston (down from "Increased"), Cleveland (up from "declining"), New York, St Louis, Kansas City, San Francisco
- Increased: Richmond (up from "declining"), Chicago, Dallas (unlike the Beige Book's overview, we include Chicago in this category with "increased slightly", the other two saw "modest" growth increases).