NAM: Fed’s Beige Book: Expansion “modest” or “moderate”
Bloomberg News (4/15, Condon) reports that on Wednesday, the Federal Reserve’s Beige Book indicated that the US economy may be on the “rebound from winter weather” that hampered the first quarter, with information from eight of the 12 regions showing “modest” or “moderate” economic growth “from mid-February to the end of March.” A Bloomberg survey of 37 economists noted that winter weather “lopp[ed] 0.5 percentage points” off the first quarter’s economic growth.
According to USA Today (4/16, Waggoner), the Fed’s latest Beige Book shows that the “economy in February and March was improving ‘modestly’ or ‘moderately’ across most districts, although Atlanta and Kansas City were simply holding steady.” The article notes that “manufacturing activity was mixed” as the dollar value hurt exports and the drop in oil prices “hurt new orders to energy supplier companies in Cleveland, Chicago, Kansas City, Dallas and San Francisco.” Generally, according to USA Today, non-financial firms saw rising activity, demand picked up for high-tech services, savings from lower energy prices juiced consumer sales, real estate supply was tight, agricultural conditions worsened slightly, energy market conditions declined, and wages remained “stubbornly low.”
The CNBC (4/15, Cox) website reported that the Beige Book “painted a mostly uninspiring picture” of the US economy, noting that profits in manufacturing were “down significantly” and “demand for manufactured products was mixed.”
In a more detailed breakdown of the Beige Book, US News & World Report (4/16, Soergel) notes that about half of the districts “reported retail sales gains” while the remainder reported retail spending as “mixed to slightly down.” The article reports that “the strong dollar, falling oil prices and the harsh winter weather” were blamed for “stagnation” in manufacturing. “Industrial production dropped 0.6 percent” from February to March, causing the first-quarter production to decline 1 percent as compared with the first quarter of 2014. US News also notes that “not surprisingly,” construction was down in the districts affected by winter weather.
According to the AP (4/16, Wiseman), the Federal Reserve reported that industrial production “got off to a stumbling start in 2015,” with a 0.6 percent drop in March that was the largest since May 2009. According to the AP, a 0.1 increase in March factory output “was driven entirely by a 3.2 percent increase in auto production” and utility output fell 5.9 percent because “Americans didn’t need to use as much heat.” The AP also reports “mining output fell 0.7 percent” in March as oil and gas drilling dropped 17.7 percent.
Reuters (4/15) reported that the drop in industrial production of 0.6 percent from February to March was more than the 0.3 percent that economists had anticipated.