Please consider the Fed Beige Book, a Summary of Commentary on Current Economic Conditions by 12 Federal Reserve Districts.

Overall Economic Activity

Overall Economic Activity On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Most Districts reported declining manufacturing activity. Activity in the banking sector was generally steady to up slightly, and loan demand was mixed, with some Districts noting an improvement in the outlook due to the decline in interest rates. Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives. Housing market activity has generally held up: inventory continued to expand in much of the nation, and home values largely held steady or rose slightly. Still, uncertainty about the path of mortgage rates kept some buyers on the sidelines, and the lack of affordable housing remained a persistent problem in many communities. Commercial real estate markets were generally flat, although data center and infrastructure projects boosted activity in a few Districts. The short-lived dockworkers strike caused only minor temporary disruptions. Hurricane damage impacted crops and prompted pauses in business activity and tourism in the Southeast. Agricultural activity was flat to down modestly, with some crop prices remaining unprofitably low. Energy activity was also unchanged or down modestly, and lower energy prices reportedly compressed producers’ margins. Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.

Last Month

On September 5, 2024, I noted Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts

Economic activity grew slightly in three Districts, while the number of Districts that reported flat or declining activity rose from five in the prior period to nine in the current period.

By District

• Increased Modestly: Boston and Dallas
• Increased Slightly: Chicago
• Flat, Unchanged, Stable: New York, Kansas City, San Francisco, St. Louis
• Decline Slightly: Philadelphia, Atlanta, Minneapolis, Cleveland, Richmond

Chicago and Dallis improved both months. Minneapolis and Atlanta decreased both months.

Last month, I noted Fed Beige Book Conditions Are Worse Now Than the Start of the Great Recession

So, things are now “steady” but that is in context of the the worst Beige Book in years.

I expect a post-election shock to the downside. We will find out soon enough.

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