Beige Book: economy increasing at slower rate than prior periods
The economy continued to grow between the middle of July and the end of August but at a slower pace than prior periods, according to the Federal Reserve. The Beige Book, which gathers anecdotal evidence of economic conditions in the dozen Fed districts nationwide, reported modest growth was experienced in most of the western districts, as well as Boston and Cleveland. Meanwhile the eastern districts and the Federal Reserve Bank of Chicago reported "mixed conditions or deceleration in overall economic activity." The Fed said home sales continued to slide, hindering construction activity, as well. Most districts reported very weak or declining home sales during the period that were attributed to the expiration of the homebuyer tax credit. Residential construction decreased in most districts during the period because of weak demand, according to the Fed. Although Cleveland, Minneapolis, and St. Louis reported evidence of increases in homebuilding. Commercial real estate demand also stayed "quite weak" with signs of stabilization in some areas of the country, according to the Fed. Also demand for industrial and retail space generally remained depressed during the period. "Consumer lending remained sluggish in general, with contacts in Philadelphia and Richmond emphasizing the role of households' ongoing efforts to reduce their debt burdens," according to the Beige Book. Increased refinancing activity of late increased demand for residential mortgages in the New York, Cleveland, Chicago, and Kansas City districts, but purchase-mortgage originations "remained quite sluggish in general" the Fed said. Write to Jason Philyaw.