What did the Beige Book Say?

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Thursday, June 3, 2021

One of the main economic data prints to come out this week was the Beige Book. This report from the Federal Reserve is published eight times per year, summarizing activity from each individual Federal Reserve Bank, or district. The report gathers anecdotal information on current economic conditions in the twelve districts through interviews with individuals both within and outside the Fed. The report provides key regional economic statistics, including personal income and gross state product.

The report was formally called the Summary of Commentary on Current Economic Conditions. The only reason it is called the Beige Book is because the cover is beige.  

The most recent report was released Wednesday. And while there were no major surprises concealed in the 31-page report, it did provide further insight into the pricing pressures and labor issues. 

Nationwide the economic recovery continued to be underway, with several districts citing higher vaccination rates and an easing of social restrictions. However, supply chain shortages are being seen across the country, from lumber to chip supplies. 

Another trend noted was the employment issue. A lack of childcare and extended unemployment are all posing obstacles as companies try to get back to normal. In fact a number of businesses were either cutting production hours due to the labor shortage, while others were giving incentive bonuses and higher wages just to attract workers.

And while the pricing pressures are building, consumers are spending on leisure, travel and homes. Bidding wars and builders worried about running out of land were all cited.

As economic activity, wages and pricing pressures continue to mount, Fed policy will continue to be under scrutiny. 

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