The Federal Reserves beige book, released today, showed the economy kept improving at the beginning of the year, though the pesky winter storms didnt help. Here are some of the highlights and oddities from the 12 districts it covers:
- Weather was an important factor, namely the severe winter snowstorms that hurt retailers and construction. But on the upside business is booming at ski resorts in the Richmond District. At any rate, weather was so important that the 50-page report mentioned it 41 times. It referenced storms 25 times.
- A sign of local budget strain? Emergency vehicle manufacturers noted a cut back in production, and added that the outlook had weakened. (Dallas District)
- It pays to challenge the landlord. The commercial real estate sector was weak and in some cases getting worse. Several Districts also noted that many tenants were pushing for, and in some cases receiving, concessions on rents.
- Housing market insecurity: Purchases of entry-level homes continue to do well, and several builders reported that the move-up category is gaining momentum. However, builders expressed concern about the potential effect on home sales once the first-time home buyers tax credit expires on April 30. They also reported that banks remain unwilling to lend money for constructing spec houses, and tight credit standards are keeping many potential buyers out of the market. (Cleveland District)
- Good news for manufacturing workers: Almost all respondents that had suspended 401(k) plan matches have resumed making matches or expect to do so shortly, manufacturing employers reported. (Boston District)
- This isnt a surprise to those who waited in two-hour lines to buy groceries before the storms. Many consumers avoided driving during dangerous road conditions, causing weakness in retail sales (except for items such as food). (Richmond District)
- Americans upgraded their TVs for the Super Bowl. the store manager at a chain discount retailer in North Carolina reported that sales of larger screen televisions were especially strong just prior to the Super Bowl football game and following the snow storms. (Richmond District)
- Tourism is improving. Atlanta also reported rising tourism activity related to several successful major sporting events and a well-attended Mardi Gras in New Orleans. San Francisco noted increases in visitors to Hawaii and Las Vegas and said hotel occupancies stabilized in some other areas.
- Two jobs for the price of one: job creation remained tepid. Businesses continued to describe attempts to do more with less, such as combining the duties of several jobs into one. (Atlanta District)
- Canada to the rescue! One major mall in western New York State reports some softening in business in February, but another reports that business remained strong through mid-month, helped by particularly strong business from Canadian shoppersparticularly on Presidents Day (Family Day, in Ontario) weekend. (New York District)
- Minnesotans are imbibing. A Minnesota-based restaurant and bar chain reported that recent same-store sales were above year-earlier levels. A movie theater in Minnesota reported that ticket sales were up during January. (Minneapolis District)
- Give them free gifts and they will come: An Outer Banks of North Carolina analyst said future bookings are up and credited the increase to creative packaging such as throwing in free linens, gas cards and gift certificates to local restaurants. (Richmond District)
- Corn is having a lot of issues. News that last falls corn harvest was a record triggered declines in the price of corn, even though a higher than typical percentage of corn acres remained unharvested. There continued to be problems with the quality of corn in storage, leading to price discounts at delivery.