The Federal Reserve’s ‘beige book’ report – drawn up in preparation for its meeting on August 21 –portrays a stagnant US economy in June and July, with the decline in manufacturing beginning to spread to other areas.
“Slow growth or lateral movement” was reported in most of the Reserve’s twelve districts. The manufacturing industry declined in “nearly all sectors and regions”, affecting other areas such as office real estate, trucking and shipping services. However, residential real estate remains robust.
Retail expenditure also fared badly, with “broad-based [weakness] across product lines and types of outlets” and a strong showing from discounters. Since prices are being pushed downwards, the Fed should not need to worry about inflation.
The ‘book’ also reported that the industrial and tech sectors remain in recession. However, it also said there were signs that technology was at or near its nadir, with one official in Chicago forecasting a recovery in the fourth quarter.
News source: Wall Street Journal