Economy Watch: Beige Book Paints Generally Stronger Picture of Economy
The latest Beige Book—formally called the “Summary of Commentary on Current Economic Conditions by Federal Reserve District”—says that national economic activity continued to expand in October and November.
By Dees Stribling, Contributing Editor
The latest Beige Book—formally called the “Summary of Commentary on Current Economic Conditions by Federal Reserve District” and was released on Wednesday—says that national economic activity continued to expand in October and November. Employment gains were widespread across 12 Federal Reserve districts, and business spending generally saw improvement. Consumer spending continued to advance in most districts, and reports on tourism were mostly positive.
Commercial real estate activity also increased in many places, with declining vacancies and rising rents for office space; especially strong activity was noted in the CBDs of some large urban areas. Residential development increased on balance across the districts, with multifamily construction remaining stronger than single-family construction in a number of places. About half of the districts reported an increase in home sales.
Construction activity expanded overall, but at a pace that varied by sector and by district. Construction of office space was relatively strong in some large urban areas, such as New York City and Philadelphia. Industrial construction was particularly strong in the Cleveland, Chicago and Dallas districts, the book said.
Non-manufacturing sector continues expansion
Economic activity in the U.S. non-manufacturing sector grew in November for the 58th consecutive month, according to the latest Non-Manufacturing ISM Report On Business, which was released on Wednesday. The report came on the heels of the recent ISM manufacturing report, which also noted continued expansion.
The organization’s Non-Manufacturing Index came in at 59.3 percent in November, 2.2 percentage points higher than in October, thus representing continued growth in the non-manufacturing sector. The New Orders Index came in at 61.4 percent, 2.3 percentage points higher than in October, but the Employment Index decreased 2.9 percentage points to 56.7 percent (but even that indicates growth; for the ninth consecutive month as it happens).
According to the report, 14 non-manufacturing industries reported growth in November. Comments from the majority of respondents show that business conditions are on track for continued growth, though some respondents also stated that there’s “some strain on capacity due to the month-over-month increase in activity.”
Private sector adds 208k jobs
Payroll specialist Automatic Data Processing reported on Wednesday that the U.S. economy added a net of another 208,000 private-sector jobs in November, with 32,000 of those jobs created in the goods-producing sector and 176,000 in the services sector. About half of the increases in jobs—101,000—were created by small businesses, or those with 49 employees or fewer, ADP notes. Its estimates may or may not jibe with the Bureau of Labor Statistics, which reports official numbers on Friday.
Wall Street experienced a modest up day on Wednesday, with the Dow Jones Industrial Average gaining 33.07 points, or 0.18 percent. The S&P 500 advanced 0.38 percent and the Nasdaq was up 0.39 percent.