The Federal Reserve’s 12 districts general reported modest economic growth from mid-May until the end of June—and they expect it to continue at that same modest pace, according to the Fed’s Beige Book released on Wednesday.
Residential real estate activity, however, continued to strengthen since the previous Beige Book reporting period (early April to mid-May), according to the Fed—despite supply issues.
“Single-family home sales increased at a moderate pace overall, with Boston, Cleveland, and St. Louis reporting strong growth,” the Fed reported. “Many Districts indicated that inventories continue to be low. Despite this persistent inventory issue, Boston, Atlanta, Kansas City, and Dallas all report that contacts have a positive outlook for the market in the next few months.”
The Fed’s districts generally reported house price increases, with modest residential construction activity across districts. Strong growth in housing starts was reported in Cleveland and Kansas City; Chicago reported little change in residential construction activity; and New York reported a decline. A lack of available lots on which to build was reported in Philadelphia, Richmond, St. Louis, and San Francisco.
Banks in the Fed districts reported overall increases in loan demand, while overall economic activity continued to expand at a modest pace across most regions, according to the Fed. Activity was steady in the Cleveland District, but the increase was moderate in Minneapolis. The Fed reported that labor market conditions remained stable as employment continued modest growth since the previous Beige Book was issued six weeks earlier. Wage pressures remained modest to moderate, according to the Fed; consumer spending across districts was generally positive but did show signs of softening.
“The outlook was generally positive across broad segments of the economy including retail sales, manufacturing, and real estate,” the Fed stated. “Districts reporting on overall growth expect it to remain modest.”
Click here to view the entire Beige Book for July 2016.