October 19, 2011 (Chris Moore)
Economic activity continued to expand at a “modest” or “slight” pace with a weaker or less certain outlook as consumers spent more in September but an uncertain future was keeping businesses from hiring and spending according to the latest edition of the Beige Book released by the Federal Reserve.
Consumer spending was up in September with most of the reported increases in auto sales. A large number of the Districts reported that non-auto retail sales remained flat while most of the Districts reported that auto sales had increased.
Real estate and construction activity was little changed from the last Beige Book with overall conditions remaining weak in all twelve Districts.
Housing construction activity, particularly single-family homes, remained at low levels with the Philadelphia, Cleveland and Minneapolis Districts reporting small increases in single family construction.
Multi-family housing construction continued to be the bright spot in a dismal housing picture as the Boston, Philadelphia, Cleveland, Kansas City, Dallas and San Francisco Districts reported that construction of multi-family housing continued at a moderate pace.
All 12 Districts reported weak home sales overall with home prices reported to be either flat or declining. Likewise, rental demand was reported to be rising across all districts.
Loan demand moved lower since the last report with the exception of an increase in mortgage refinancing reported by many districts.
Consumer loan demand declined in the Cleveland, Chicago and Kansas City Districts while the New York and San Francisco Districts reported consumer loan demand held steady.
The New York, Philadelphia, Cleveland, Richmond, Chicago and Kansas City Districts all reported increased mortgage refinancing due to lower mortgage rates.
Loan standards by some Districts was reported as tight, but the strong competition for high quality buyers by banks was leading to lower rates and fees for customers.
Tags: Federal Reserve, Beige Book, housing market, real estate markets, single family homes, multifamily market, construction activity
Source:
Federal Reserve
