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Fed's "Beige Book" Report Paints a Darker Picture

Published 09/04/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

Consumers and businesses continue to struggle through a prolonged economic downturn, according to a report released by the Federal Reserve Wednesday.

The Fed’s beige book report - a snapshot of current business conditions released every six months - found that economic conditions have slowed across the country since late July. Throughout the report, business conditions are described as “weak,” “soft” or “subdued” across the country.

The anecdotal evidence gleaned from the report suggests that strapped consumers, skyrocketing prices for staples and the struggling real estate market are at the root of the current problems. The report also said that consumers “concentrated on necessary items and retrenchment in discretionary spending.”

The report found that manufacturing, real estate and construction have been hit especially hard, describing those industries as “weak or declining” in most regions. Some of the few bright spots in the report were in the agricultural, energy and mining sectors. The weak dollar seems to have aided the international tourism industry as well.

The Fed’s policymaking body is scheduled to meet again Sept. 16. To prevent any further weakening of the economy, the Fed is expected to leave interest rates unchanged.

Source The Wahsington Post:

The economy has remained weak across most of the nation, according to anecdotal reports from businesses collected by the Federal Reserve, despite some recent positive signs in economic indicators.

"The economy is stabilizing, but at a very low level," said John Silvia, chief economist for Wachovia. "We're still losing jobs. We're not out of the woods at all."

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