Economy Watch: Residential, Commercial Activity Up a Bit, Says Beige Book

Construction activity picked up slightly in the residential and commercial real estate industries across the 12 Federal Reserve Districts, the latest Beige Book reported.
Coutesy of Elvert Barnes via Wikimedia Commons
Coutesy of Elvert Barnes via Wikimedia Commons

Economic activity expanded at a “modest to moderate” pace across all 12 Federal Reserve Districts in July and August, according to the latest edition of the Federal Reserve’s Beige Book. Consumer spending increased in most districts, with gains reported for non-auto retail sales and tourism, and mixed results for vehicle sales.

Both residential and commercial construction increased slightly overall, the Fed said. Low inventories of homes for sale continued to weigh on residential real estate activity across the country, while commercial real estate activity increased slightly.

Labor shortages

Capital spending also increased in several districts. Manufacturing activity expanded modestly, though reports were mixed regarding auto production. Contacts in many districts expressed concerns about a prolonged slowdown in the auto industry.

Employment growth slowed in some places, ranging from a slight to a modest rate decrease in most districts, yet labor markets were widely characterized as “tight.” There were reports of worker shortages in numerous industries, most notably in manufacturing and construction. Firms in the Atlanta, St. Louis and Minneapolis districts said they had turned down business because they couldn’t find the necessary workers.

Hurricane Harvey created broad disruptions to economic activity along the Gulf Coast in the Dallas and Atlanta Districts, although it was too soon to gauge the full extent of the impact, the Beige Book also noted.