The U.S. economy continued to improve, on balance, during the period from early/mid-October to mid-November, according to the Federal Reserve’s “Beige Book,” a compendium of economic reports from the central bank’s twelve districts.

The Fed indicated that economic activity in Boston, Cleveland, Atlanta, Dallas, and San Francisco increased “at a slight to modest” pace, while a “somewhat stronger pace” of economic activity was seen in New York, Richmond, Chicago, Minneapolis, and Kansas City. Philadelphia and St. Louis reported business conditions as “mixed.”

“Manufacturing activity continued to expand in almost all Districts, with relatively strong growth seen in metal fabrication and the automotive industries,” the Fed stated.

“Reports also showed steady to increasing activity for professional and nonfinancial services. Two Districts noted a decline in demand from government agencies due to budgetary shortfalls.”

Consumer spending data “tended to be positive,” but the report indicated that in several districts households “remain price-sensitive and focused on buying necessities.”

“Expectations for the holiday shopping season were generally positive, with several Districts expecting higher sales when compared to year-ago levels,” the Beige Book also said.

“Sales of new cars and light trucks were largely higher than in our last report.”

However, the Fed warned that housing markets remain depressed, with several Districts reporting further weakening during the past six weeks.

“Conditions in commercial real estate were mixed, and activity stayed at low levels,” the Fed indicated.
Moreover, residential real estate and construction activity remained at a low level in all Districts.

“The Philadelphia, Atlanta, St. Louis, and Minneapolis Districts reported some further weakening in home sales,” the bank stated.

“Boston, New York, and Richmond characterized the market as soft; while Cleveland, Kansas City, Dallas, and San Francisco described the market as sluggish. The Chicago District reported that high inventories of unsold homes continued to be a drag on new residential construction and home prices.

Residential house prices were mixed, the report stated.

Price declines were observed in New York, Philadelphia, Atlanta, and Kansas City; prices were flat to up in Minneapolis, and prices edged up in Boston, the Book noted. The Dallas District reported that home prices increased on a year-over-year basis.”

Prices for final goods and services were fairly stable, despite rising input costs, especially for agricultural commodities, metals, and fuel, the Book stated.

The Beige Book further indicated that manufacturing activity continued to expand in most Districts -- only New York reported a weakening of manufacturing activity, while Dallas reported that manufacturing was mixed.

Retail spending, the report cited, showed improvement across most Districts, with the exception of Boston, Cleveland, Richmond and St. Louis, where results were mixed.

Furthermore, the Book described the nation’s banking condition as “stable across most districts.”

“Lending activity was reported as steady or unchanged in New York, Philadelphia, St. Louis, Kansas City, Dallas, and San Francisco, while a slight improvement was noted in Cleveland, Richmond and Chicago,” it said. “The Atlanta District reported constrained credit conditions and weak loan demand.”

Finally, the Book noted that hiring activity “showed some improvement across most Districts, although employers are waiting for clearer signals of expanding business prospects before adding significantly to payrolls”