Economy Watch: Growth Continues to Plod Along, Says Beige Book

Two recent federal reports show overall continued, albeit sluggish, economic growth, including in the commercial and residential real estate industries.

The Federal Reserve released its lastest Beige Book this week, formally known as the “Summary of Commentary on Current Economic Conditions by Federal Reserve Districts.” Reports from the 12 districts suggest that February and March 2016 saw continued expansion of economic activity, though the pace of growth varied by district.

Credit: The Bureau of Labor Statistics' Consumer Price Index- March 2016
Credit: The Bureau of Labor Statistics’ Consumer Price Index- March 2016

Most districts said that economic growth was in the “modest to moderate” range, which has been the case for a long while now, and that most of the Fed’s sources of information expected growth would remain in that range going forward. Consumer spending increased modestly in most places and reports on tourism were mostly positive. Labor market conditions continued to strengthen and business spending generally expanded.

Construction and real estate activity also grew. Residential real estate activity strengthened, on balance, with robust growth in San Francisco, Cleveland, and Boston, but there were more mixed reports from Dallas, Kansas City and Atlanta (these refer to the districts, whose territory is always larger than the city they’re named after). Multifamily construction remained strong in most districts. Commercial real estate activity also increased, with leasing activity and rents rising in many districts. Particularly strong leasing was noted in retailing in Chicago and in the industrial sector in Dallas.

Also reported this week: the Bureau of Labor Statistics said that the Consumer Price Index for All Urban Consumers increased 0.1 percent in March. Over the last 12 months, the all items index rose 0.9 percent. The food index declined in March, while the indexes for energy and for all items less food and energy, the so-called core rate, rose. The energy index rose for the first time since November, with all of its major components except natural gas increasing.