Beige Book Strikes More Optimistic Tone
- Jan 16, 2014
The Federal Reserve released the latest Beige Book on Wednesday, or to use its full formal name, the “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” and it had some positive things to say about the U.S. economy. “Nine Districts indicated the local economy was expanding at a moderate pace,” the book says. “The economic outlook is positive in most Districts, with some reports citing expectations of ‘more of the same’ and some expecting a pickup in growth.”
Regarding residential real estate, most districts reported increases in home sales in the closing months of 2013 compared with last year. Residential construction saw “slight to moderate increases” in most districts. “Reporting Districts indicated that residential real estate contacts remained optimistic looking forward, while voicing concerns about declining inventory and potential changes in the mortgage market,” the book says.
As for commercial real estate, there was much good news. “Excepting the New York and Dallas Districts, which gave no information on recent construction, all other Districts reported increases in commercial construction activity in recent weeks,” the Beige Book says. “In the Boston and Richmond Districts, construction activity increased in the education and healthcare sectors. A significant number of commercial high-rise structures are being built (or planned) in the San Francisco District. Information concerning the commercial real estate outlook was largely positive where it was reported.”
World Bank Hopeful on World Economic Growth
The World Bank was optimistic about global economic growth for the new year in its more recent “Global Economic Prospects” report, which was released earlier this week. “Most of the acceleration is expected to come from high-income countries, as the drag on growth from fiscal consolidation and policy uncertainty eases and private sector recoveries gain firmer footing,” the report notes. Worldwide, the World Bank is predicting 3.2 percent economic growth this year, up from 2.4 percent in 2013.
The U.S., European, Japanese, and other fully developed economies will continue to see improvement, the report predicts, rising 2.2 percent this year. That isn’t stellar growth, but it’s a lot better than the 1.3 percent growth the developed world experienced in 2013. The largest developing economies, namely China and India, will also pick up the pace – to more than 5 percent — though not into double-digits growth they previously enjoyed.
Wall Street had another up day on Wednesday, with the Dow Jones Industrial Average gaining 108.08 points, or 0.52 percent. The S&P 500 was up 0.52 percent and the Nasdaq advanced 0.76 percent.