Like it’s title, “Beige Book” offers mostly bland outlook

Raymond Keating
Raymond Keating

Eight times a year, the Federal Reserve releases its “Beige Book,” an assessment of economic activity in each of its 12 districts based on anecdotal evidence. While the report helps Fed policymakers make decisions on monetary policy, the report also offers a tool for small businesses.

So what does the latest report communicate to those keeping an eye of the state of the economy, including small business owners trying to plan and make a wide array of business decisions? The overly cheerful talk on the economy from parts of the political sphere is somewhat overblown when compared to the Beige Book’s modest report. Consider these quick points from each district:

First District — Boston: “Business contacts in the First District are fairly upbeat this round, notwithstanding selective negative impacts from unseasonably severe weather in southern New England.”

Second District — New York: “Growth in the Second District’s economy has continued to expand at a moderate pace since the last report.”

Third District Philadelphia: “Aggregate business activity in the Third District continued to grow at a modest pace during this current Beige Book period.”

Fourth District — Cleveland. “On balance, the Fourth District’s economy expanded at a modest pace during the past six weeks.”

Fifth District — Richmond: “On balance, the Fifth District economy grew at a slower pace since the previous Beige Book.”

Sixth District — Atlanta: “The Sixth District’s economy continued to grow at a moderate pace from January to early February.”

Seventh District —Chicago: “Growth in economic activity in the Seventh District remained moderate in January and early February, and contacts expected growth to continue at a similar pace over the next six to twelve months.”

Eighth District — St. Louis: “Economic activity in the Eighth District has increased at a moderate pace since the previous Beige Book.”

Ninth District — Minneapolis: “The Ninth District economy grew at a moderate pace since the previous report.”

Tenth District — Kansas City: “The Tenth District economy continued to grow slightly in January and early February, and most contacts remained optimistic about future activity.”

Eleventh District — Dallas: “The Eleventh District economy expanded at roughly the same pace as in the prior reporting period… Overall expectations for the future were generally positive, but contacts expressed uncertainty and caution in their outlooks.”

Twelfth District — San Francisco: “Economic activity in the Twelfth District continued to improve moderately during the reporting period of early January through mid-February.”

At least based on this Fed assessment, small business owners trying to figure out planning, investing and hiring are not getting signs of a major step-up in economic growth. Something to ponder, just as Federal Reserve bankers do.