Beige Book details drab outlook

Economic activity weakened across the country since mid-October, as the credit crisis had an impact on the broader economy, according to the Federal Reserve's Beige Book. The report found that conditions are darkening in most areas of the economy. "Districts generally reported decreases in retail sales, and vehicle sales were down significantly in most districts," said the report, which is based on information collected by the Federal Reserve Bank of Minneapolis before Nov. 24. Each of the Federal Reserve districts said that the labor markets weakened as layoffs accelerated. Consumer spending slumped in most districts, while retail sales declined and sales of big-ticket items fell sharply, as the Fed predicted that retail is preparing for “relatively slow holiday sales.” The report also found that spending on tourism was “subdued” in several districts, and reports on the services sector were generally negative. Furthermore, the report found that manufacturing declined in most districts. The commercial real estate markets declined in most districts, as lending contracted and many districts reporting reductions in residential, commercial and industrial lending and tightening lending standards. On a bright note, farmers were expecting a “relatively good harvest,” but faced concerns about profitability.