Economy Watch: Fed’s Beige Book Sees Continued U.S. Economic Growth

Consumer spending appears to be rising across a majority of districts, led by increases in non-auto retail sales and tourism, which bodes well for retailers and hotels.

Janet Yellen, Chair of the Board of Governors of the Federal Reserve System (Photo by Paul Morigi)
Janet Yellen, Chair of the Board of Governors of the Federal Reserve System (Photo by Paul Morigi)

Economic activity expanded across all 12 Federal Reserve districts in June, with the pace of growth ranging from “slight to moderate,” according to the latest edition of the Fed’s Beige Book, which was released on Wednesday. That seems to compare unfavorably to earlier this year, when the growth estimates were either “modest” and “moderate,” in Fed-speak. Fairly good, in other words, and certainly better than “slight.”

In any case, consumer spending appears to be rising across a majority of districts, led by increases in non-auto retail sales and tourism, which ought to be happy news for retailers and hotels. However, many districts noted some softening in consumer spending, particularly in auto sales, which declined in half of the Districts.

Manufacturing and non-financial services activity continued to grow, with most districts reporting modest to moderate gains since the last report, which is generally good for industrial and office space demand. Residential and nonresidential construction activity was flat to expanding in most districts, with most citing low home inventory levels.

Software and IT firms reported year-over-year revenue growth ranging from down 2 percent to up 10 percent. One data storage and security firm experienced strong revenue growth, spurred by the high cyber-threat environment. A health care software provider also had strong annual revenue growth, while a manufacturing enterprise software provider had flat revenue but anticipates increased demand moving forward. Data backup and health care IT contacts were optimistic about future growth.