Wednesday, March 4, 2009
Status Quo of US Economy - from Beige Book
--Consumer spending and Trouism: remained week, a.discretionary spending is sliding; b.sale of auto and eletronics remain sluggish --Manfaucturing: weak across the board except biotechnology manfaucturing --Nonfinancial services: significant drops; a.healthcare reported fall in patient volumes; b.demanf fall for business consulting and accounting; c.providers of IT servies saw a drop in activity on average; d.demand of staffing weakend significantly --residentail: remain in the doldrum a.price continue to slide b.housing inventory remain high though corrected at some degree c.credit remain tight and it standard is getting high to approve mortgage loan --banking a.demand for commericial and consumer loan decreased b.less credit available as more banks remain under the water Consumer spending remained sluggish on net, although many Districts noted some improvement in January and February compared with a dismal holiday spending season. Travel and tourist activity fell noticeably in key destinations, as did activity for a wide range of nonfinancial services, with substantial job cuts noted in many instances. Reports on manufacturing activity suggested steep declines in activity in some sectors and pronounced declines overall. Conditions weakened somewhat for agricultural producers and substantially for extractors of natural resources, with reduced global demand cited as an underlying determinant in both cases. Markets for residential real estate remained largely stagnant, with only minimal and scattered signs of stabilization emerging in some areas, while demand for commercial real estate weakened significantly. Reports from banks and other financial institutions indicated further drops in business loan demand, a slight deterioration in credit quality for businesses and households, and continued tight credit availability. Upward price pressures continued to ease across a broad spectrum of final goods and services. This was largely associated with lower prices for energy and assorted raw materials compared with earlier periods, but also with weak final demand more generally, which spurred price discounting for items other than energy and food. With rising layoffs and hiring freezes, unemployment has risen in all areas, reducing or eliminating upward wage pressures. A number of reports pointed to outright reductions in hourly compensation costs, through wage reductions and reduction or elimination of some employment benefits.