Washington, DC, November 29, 2006--Economic conditions have improved slightly over the past month, with increasing retail sales and cautious optimism about the holiday-shopping season, the Federal Reserve's latest survey of economic conditions found.
The Fed's beige book, released Wednesday, found that most districts reported moderate growth. Only the Dallas region said activity had slowed, but from "high levels" and the Atlanta Fed reported that activity was "mixed." Growth accelerated in the New York and Richmond regions.
This is in contrast with the previous survey in early October, which showed more regions feeling that activity had slowed.
Only the automobile and housing sectors were seen as drags on activity.
Inflation seemed to be almost entirely off the radar, with only price declines for construction materials and energy products mentioned at all.
The report found that labor markets were tight, especially for high-skilled occupations. These workers were also able to request stronger wage increases.
The survey found no evidence that the housing market slowdown may be bottoming out.
"Almost all Fed districts reported that overall housing market activity continued to slow, especially in the single-family segment," the report said.
Declining home sales and rising inventories and declines in residential construction were seen across the country. There were also "scattered" reports of price reductions.
Most regions also reported continued softness in auto sales.
Outside of housing and autos, factory activity was positive overall, the survey found.
Consumer spending was increasing in most districts, although Boston and Dallas were more cautious.
Reports from the tourism industry were generally upbeat. The demand for services "remained healthy" according to most reports.
A contact in Boston said that tourism was "going gangbusters."
On the other hand, commercial real estate markets improved over the past month.
The "beige book" is a collection of anecdotal evidence compiled by the 12 Fed regional banks. It is designed to give policymakers a better sense of economic activity in the weeks before they meet to set monetary policy. The next FOMC meeting is Dec. 12.
