Beige Book shows economy expanding in most parts of the country
Economic expansion picked up in most parts of the country over the last few weeks of 2011, according to the Federal Reserve. The Beige Book, which gathers anecdotal evidence of economic conditions in the dozen Fed districts nationwide, showed seven districts reported modest growth, while four noted moderate growth and one indicated flat to slight improvements over the period. "Compared with prior summaries, the reports on balance suggest ongoing improvement in economic conditions in recent months, with most districts highlighting more favorable conditions than identified in reports from the late spring through early fall," the Beige Book stated. The Fed said residential real estate activity "held steady at very low" levels in all districts, although multifamily construction improved. Home prices stayed largely stable in most areas but stayed below year-earlier levels, as extensive inventories of distressed properties in a few districts continue to drag down property values. Single-family home construction remained slow in most areas and fell further in the Philadelphia, St. Louis, Minneapolis, and Kansas City districts, according to the Beige Book. The market for rental units tightened in some areas and demand for commercial real estate was stronger over the period than earlier in 2011. The Fed said "lending standards were largely unchanged across all lending categories" over the final few weeks of November and all of December. "However, New York reported slight tightening for commercial and industrial loans," according to the Fed. "Moreover, a few reports highlighted that small businesses continued to struggle with credit access through banks. In the Atlanta district, some small businesses have turned to nonbank institutions for financing, and in the Chicago district some manufacturers have been financing loans to their suppliers from retained earnings." The next meeting of the Federal Open Market Committee and its newly constituted voting bloc is set for Jan. 24-25. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw.