Economy

Fed's Beige Book Finds Concern Above Auto Slowdown

Fed's Beige Book Finds Concern Above Auto Slowdown”

Without offering specifics, the Beige Book said Hurricane Harvey "created broad disruptions to economic activity along the Gulf Coast in the Dallas and Atlanta Districts".

However, the district's economy continued to expand modestly.

Meanwhile, contacts in the Richmond District indicated that "spot freight prices jumped after the storm", as freight was being redirected around the country, according to the survey.

However, "Some areas experienced gasoline shortages and supply was expected to remain tight in the southeastern United States because of pipeline disruptions", the report said in a note on the hurricane.

Research shows growth could rise as high as 1.9 percent from the current forecast of 1.5 percent, he said in a seminar.

Executives in the tech, wholsesale-trade and professional sectors in Colorado and neighboring states saw "a strong increase in sales" in late July and August, while consumer spending "was mostly flat".

Automakers have seen moribund sales so far this year after a record 2016, except for trucks and SUVs.

Employment growth slowed some on balance, ranging from a slight to a modest rate in most Districts.

According to the report, prices rose modestly overall across the country as input and materials costs generally increased, "most notably for freight, lumber, and steel".

Businesses in the Atlanta Fed district, for example, faced labor shortages but dealt with them by trying to "increase operational efficiencies by evaluating whether to fold one job into another, replace positions with technology...or shift the salary towards training and development of other employees". A declining unemployment rate has failed to boost inflation, which has some of them questioning the wisdom of raising interest rates again this year following hikes in March and June.

The Federal Reserve's so-called Beige Book, a collection of anecdotes about the economy gathered before the central bank makes interest-rate decisions, said reports were mixed about auto production.



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