RTTNews - Economic conditions remained weak or deteriorated further during the period from mid-April through May, according to the Federal Reserve's Beige Book released on Wednesday, although five of the twelve Fed districts noted a moderation in the downward trend.
While the Beige Book also said that contacts from several Fed districts indicated an improvement in their expectations, they do not see a substantial increase in economic activity through the end of the year.
Commenting on the report, Peter Boockvar, equity strategist at Miller Tabak, said, Based on the less negative economic data we've seen over the past few months, these comments are as expected.
The report, a compilation of anecdotal evidence on economic conditions from each of the twelve Federal Reserve districts, said manufacturing activity declined or remained at a low level across most districts.
However, the Fed said that several districts also reported that the outlook by manufacturers has improved somewhat.
Consumer spending remained soft, according to the Beige Book, as households focused on purchasing less expensive necessities. Nonetheless, reports from New York, Minneapolis, and Dallas indicated a modest increase in sales.
The Fed said that purchases of new cars remained depressed, although Chicago saw a small increase in auto sales that respondents attributed to incentives and promotions.
At the same time, the report showed that a number of districts reported an uptick in home sales, citing low interest rates, declining house prices, and tax credits for first-time buyers. New home construction also appeared to have stabilized at very low levels.
On the inflation front, the Fed said that most districts reported that prices at all stages of production were generally flat or falling. One exception to the downward pressure on prices was an increase in oil prices.
The Fed added that labor market conditions continued to be weak across the country, with wages generally remaining flat or falling.
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