Consumer spending was characterized as softening across most of the country, with some Districts reporting year-over-year declines in retail and/or auto sales. In contrast, tourism was generally described as strong, with a number of Districts noting particular strength in foreign visitors. Reports on nonfinancial services varied by District: demand for transportation services was generally characterized as weak, while business and health services continued to expand; other service industries were said to be mixed. Trends in manufacturing also varied across Districts. Reports on real estate and construction were generally anemic for the residential sector; activity in the commercial sector has slowed. Financial institutions in many Districts indicated some deceleration in consumer loan demand, tightening in lending standards, and deterioration in asset quality. Most Districts reported improved conditions in the agricultural sector and robust activity in the energy industry.
Labor markets were mostly described as weakening since the last report, though a few Districts reported ongoing shortages of skilled workers and some Districts noted wage pressures. Increases in input costs were widespread, accompanied by somewhat smaller rises in selling prices.
In the Philadelphia (Third District) region, activity in the Third District, on balance, appeared to soften further in March, although some sectors made slight gains. Manufacturers reported declines in new orders and shipments, overall. Retailers generally reported sluggish sales, with many posting year-over-year decreases. Auto sales continued to fall. Bank lending has continued to increase moderately. Residential real estate sales and construction remained well below the pace of a year ago. Commercial construction activity remained slow. Service-sector firms gave mixed reports; some have had modest growth, but others have experienced declining business. Reports of increases in input costs and output prices were about as prevalent in March as they were in February. Wage increases were reported to be moderate.
The outlook among Third District businesses varies. Manufacturers' forecasts have improved somewhat since the last Beige Book. On balance, they expect increases in shipments and orders during the next six months. However, retailers have generally made further downward revisions to their 2008 forecasts, and some are uncertain that sales will turn up before the year comes to a close. Auto dealers expect sales in 2008 to be below those of 2007. Bankers anticipate slow expansion in overall lending but expect further deterioration in credit quality. Residential real estate agents expect sales to continue to be slow through the rest of the year. Contacts in commercial real estate anticipate slower leasing activity and fewer building sales this year compared with last year.
Source Beige Book
Click here for the Federal Reserve April 2008 Beige Book [Beige Book Archives]
See related blog articles:
Federal Reserve Beige Book For Economic Conditions (What is the "Beige Book"?)
The Federal Reserve - Making Sense In Plain English
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