On Wednesday, November 29th local time, the Federal Reserve's "Brown Book" on economic conditions showed that economic activity in the United States has slowed down in recent weeks.
The Federal Reserve releases its "Brown Book" eight times a year, summarizing the results of 12 regional reserve banks' assessments of the US economic situation. This report is an important reference material for the Federal Reserve's monetary policy meeting.
In terms of overall economic activity, Brown Book stated that there has been a slowdown in economic activity compared to the previous report. Out of 12 regional Federal Reserve banks, 4 reported slight growth, 2 remained stable or slightly declined, and 6 reported a slight economic decline.
The retail industry remains mixed, with sales of non essential and durable goods decreasing due to consumers showing higher sensitivity to prices. Tourism activities are generally healthy, transportation service demand is sluggish, and the prospects for the manufacturing industry are weakening.
The demand for operating loans has slightly decreased, especially for real estate loans. Consumer credit remains healthy, but some banks have noticed a slight increase in consumer default rates. Due to the increase in sales prices reported by farmers, agricultural conditions have remained stable or slightly increased, with both good and bad yields.
Commercial real estate activities continue to slow down, while the office sector remains weak. Several regions have noticed a slight decrease in residential sales and an increase in inventory of available properties. The report also shows that the economic outlook for the next 6 to 12 months has weakened.
In terms of the labor market, demand continues to ease. Most regions have reported stable or moderate overall employment growth, with more available job seekers and an increase in retention rates. However, several regions still indicate that labor supply and demand remain tight, with a shortage of skilled workers.
Most regions have maintained moderate wage growth, with some easing of wage pressure, and several regions have reported a decrease in starting salaries. However, in some places, the Federal Reserve has stated that wage pressure does persist, making it difficult to attract and retain high-performance employees and workers with specialized skills.
In terms of prices, the price increase in 12 regions has basically slowed down, but still remains at a high level. Overall, freight and transportation costs have decreased, while the cost of various foods has increased. Some regions claim that the cost of building inputs such as steel and wood has stabilized or even decreased, while the increase in public utilities and insurance costs is evident in all regions.
The pricing power of enterprises has differentiated, and service industry companies are more likely to raise prices than manufacturing industry companies. Two regions have identified the increase in debt costs as an obstacle to business growth, and most regions expect a mild upward trend in prices to continue until next year.
Earlier in the day, Atlanta Fed Chairman Bostic wrote in an article on his official website that he is increasingly convinced that inflation is firmly on the path of decline.
Bostic stated that in recent weeks, the feedback from the Regional Economic Information Network (REIN) of the Federal Reserve in this region has not changed, indicating that "increasing evidence suggests that the impact of tightening monetary policy on economic activity is becoming increasingly significant.".