Below is a summary of the Overall activity and by district. A key and oft repeated word is "slight" or "moderate".
Not to hot. Not to cold.
There were 23 mentions of tariffs and 9 mentions of immigration.
Overall Economic Activity:
- Economic activity increased slightly to moderately across the twelve Federal Reserve Districts in late November and December.
- Consumer spending moved up moderately, with strong holiday sales exceeding expectations.
- Vehicle sales grew modestly.
- Construction activity decreased, with high costs for materials and financing weighing on growth.
- Manufacturing decreased slightly on net; some manufacturers stockpiled inventories in anticipation of higher tariffs.
- Residential real estate activity was unchanged, constrained by high mortgage rates.
- Commercial real estate sales edged up.
- Nonfinancial services sector grew slightly, with growth in leisure, hospitality, and transportation (notably air travel).
- Truck freight volumes declined.
- Financial service providers reported modest growth in lending and little change in asset quality, but concerns arose about delinquencies among small businesses and lower-income households.
- Nonprofit social service agencies faced high demand amidst uncertainty about funding.
- Agricultural conditions remained weak, with lower farm incomes and weather-related struggles. Avian flu reduced egg supplies, raising prices.
- Energy activity was mixed.
- More optimism about 2025 outlook, though concerns remain about immigration and tariff policy affecting the economy.
Labor Markets:
- Employment ticked up slightly, with six Districts reporting increases and six reporting no change.
- Service industries, notably healthcare, continued to see job growth.
- Construction employment increased slightly, while manufacturing employment was flat.
- Difficulty finding skilled workers was reported across multiple sectors.
- Layoffs remained rare, though some contacts expressed greater uncertainty about future staffing needs.
- Wage growth picked up to a moderate pace, but there were reports of easing wage pressures.
Prices: Prices rose modestly
- Prices increased modestly overall, with growth ranging from flat to moderate.
- Selling prices rose modestly in most Districts, with some instances of flat or declining prices, particularly in retail and manufacturing.
- Input costs increased, particularly for insurance prices (notably health insurance).
- Flat or lower input costs were reported in some areas, especially for fuel.
- Prices expected to rise in 2025, with concerns about higher tariffs contributing to price increases.
District Summary:
Boston
- Economic activity increased slightly, with modest growth in tourism, home sales, and retail sales.
- Prices were steady despite slight cost pressures.
- Employment stable; wages increased modestly.
- Optimistic expectations, though some uncertainty remains.
New York
- Economic activity increased slightly; employment grew slightly.
- Stronger-than-expected holiday retail sales.
- Commercial real estate markets improved slightly, especially NYC office demand.
- Selling prices rose modestly, with manufacturers reporting stable prices.
Philadelphia
- Business activity grew slightly, with auto sales leading consumer spending.
- Manufacturers reported a slight decline in activity.
- Employment and wages rose modestly.
- Inflation concerns driven by deficits, tariffs, and immigration.
Cleveland
- Business activity grew modestly; stronger-than-expected retail sales.
- Manufacturers experienced soft demand.
- Employment flat; wages and prices grew modestly.
- Positive outlook for the coming months.
Richmond
- Modest economic growth with moderate increases in consumer spending and travel.
- Financial services reported modest growth; manufacturing slowed slightly.
- Employment unchanged; price growth moderate.
Atlanta
- Economic activity expanded modestly; employment steady, wages grew slowly.
- Consumer spending and housing demand grew moderately.
- Manufacturing declined slightly, while energy activity grew modestly.
Chicago
- Slight growth in economic activity; modest increases in consumer spending and employment.
- Construction and real estate remained flat.
- Farm incomes in 2024 were below 2023 levels.
- Prices and wages grew modestly.
St. Louis
- Slight economic expansion; holiday sales exceeded expectations.
- Reports reflected a seasonal slowdown, but contacts were positive about the year ahead.
Minneapolis
- Slight growth in economic activity; employment increased slightly.
- Holiday sales were upbeat, surpassing pre-pandemic levels.
- Manufacturing contracted modestly, but optimism remains for 2024.
Kansas City
- Slight expansion in economic activity, led by consumer spending.
- Consumers relied more on long-term financing and debt consolidation.
- Optimism for accelerated growth and hiring in coming months, though concerns over policy changes persist.
Dallas
- Moderate expansion in the economy; manufacturing resumed growth.
- Retail revenues and loan demand expanded.
- Home sales increased slightly, but energy activity remained flat.
- Employment rose slightly, with improving outlooks despite policy concerns.
San Francisco
- Slight expansion in economic activity; employment and prices were stable.
- Retail sales grew modestly, while activity in agriculture softened slightly.
- Manufacturing and commercial real estate were mixed, with steady housing and lending activit
This article was written by Greg Michalowski at
www.forexlive.com.
