No Happy Ending in Sight in Fed’s Beige Book

25 October 2002

The US Federal Reserve’s latest state-of-the-nation ‘beige book’ report provides yet another snapshot of an economy struggling to achieve healthy growth.

Of the Fed’s twelve regional banks from whose observations the survey is drawn, only two – St. Louis and San Francisco – reported stronger expansion than last month.

As in the September study, the Fed found signs of positive but inconsistent growth. Retail sales were weak as auto-buying eased, wage increases were small, and manufacturing growth either slowed or, in some areas, fell into decline.

The Dallas report was particularly downbeat, revealing that businesses “were significantly more pessimistic about the outlook for growth through the rest of the year, citing concerns about war, terrorism, the dock workers’ strike on the West Coast, declining stock market and upcoming elections.”

The beige book is drawn up ahead of each meeting of the Federal Open Market Committee, the next being November 6. The committee is expected to leave interest rates unchanged.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff