Beige book paints dark economic picture

Economic activity has slowed in the past month, with Americans buying fewer goods in all categories.
JUL 24, 2008
By  Bloomberg
Economic activity has slowed in the past month, with Americans buying fewer goods in all categories, according to the Federal Reserve’s June and July beige book report of economic activity, which it released today. The report indicated that consumer spending was sluggish or slowing in all but one of the 12 Federal Reserve districts, with Cleveland being the exception. Consumer spending normally accounts for about two-thirds of U.S. economic growth. The report also indicated “restrained” loan growth, with residential and consumer lending “showing more weakness” than commercial lending. There was also worrisome information on inflation, with all 12 districts indicating that price pressures were “elevated or increasing.” Wage pressures were also said to be “elevated or increasing.” The Fed offered a grim outlook for some regions. “While several districts reported widespread weakness in the financial services, auto and construction industries. contacts in the Cleveland, Atlanta, Chicago and Kansas City districts reported very little upward wage pressures, with the exception of the energy and skilled labor markets,” according to the report. “San Francisco noted some downward movement in wages for construction, finance, real estate and retail jobs. But Boston and Dallas said more workers were requesting wage adjustments to supplement cost of living increases,” according to the report. The news, along with a dismal report on existing home sales, sent stocks lower. At around midday, the Dow Jones Industrial Average was down about 1.13%, and the Standard & Poor’s 500 stock index was off about 1.12%. The Nasdaq Composite Index, meanwhile, had fallen about 0.98%.

Latest News

Alaris Acquisitions CEO: AI-driven staff reductions could boost RIA valuations
Alaris Acquisitions CEO: AI-driven staff reductions could boost RIA valuations

CEO Allen Darby sees a coming shift in M&A dynamics as AI eliminates clerical roles at RIAs, leaving buyers and sellers to negotiate who benefits from the added margin.

Private equity in 401(k)s is 'inevitable,' says Meketa Capital CEO
Private equity in 401(k)s is 'inevitable,' says Meketa Capital CEO

Michael Bell explains how the PE push in retirement plans will benefit investors, why warnings around risks may be overplayed, and what it will take to get plan fiduciaries comfortable with private investments.

IRA rollovers from DC plans to hit $1.15T by 2030, LIMRA says
IRA rollovers from DC plans to hit $1.15T by 2030, LIMRA says

Research highlights the dominant role of workplace retirement plans and breaks down the major factors dictating workers' IRA rollover decisions.

GReminders unveils autonomous AI assistant for financial advisors
GReminders unveils autonomous AI assistant for financial advisors

The wealth tech firm is rolling out its "Do Anything" assistant as leaders and strategists tout the next evolution of artificial intelligence.

Court strikes down SEC CAT funding plan, puts broker-dealer costs under fire
Court strikes down SEC CAT funding plan, puts broker-dealer costs under fire

Appeals court overturns SEC’s CAT funding plan, broker-dealers face new uncertainty.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.