The District has continued to see steady, ongoing growth in economic activity throughout the last few months but at a pace that’s somewhat slower than it was earlier this year.
Anecdotal accounts from District contacts are consistent with a slight softening in economic activity. Some of this softening is attributable to developments in the auto sector. As auto sales have slowed, auto makers have reduced production. Given that the District’s auto production accounted for almost 16 percent of national light-vehicle production and about 30 percent of national passenger-car production in 2016,1 these cuts have had and are likely to continue to have a negative impact on the manufacturers and service providers tied to the industry. Nevertheless, reports from freight and construction contacts suggest that conditions remain relatively favorable for their firms, though these firms tend to see more activity at this time of the year.
Generally good economic conditions continue to support a strong labor market in the District. Through June, District employment grew 1.1 percent relative to that of this time a year ago, while the District’s unemployment rate has remained low and stable at about 5.0 percent for slightly longer than the last two years.
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Fourth District Beige Book
The Beige Book, released 8 times a year, contains reports of economic conditions across the United States by region. Reports are based on information gathered primarily through interviews with business people and are prepared by each of the 12 Federal Reserve Banks for their respective Districts.
Below is the most recent summary from the Fourth District’s Beige Book report.Summary of Economic Activity
Growth in economic activity across the Fourth District slowed to a modest pace during the reporting period. Labor markets continued to expand, with wage pressures noted primarily for high-skilled workers. Upward pressures on prices paid and received eased slightly. Contacts facing higher input prices experienced little pushback from customers when raising their selling prices. Consumer spending at brick-and-mortar establishments remained stable, while new motor vehicle sales rose. Production increased at manufacturing plants, although at a slower pace than in the previous reporting period. Nonfinancial services firms experienced moderate revenue growth overall, but demand was strong for IT and management consulting. Housing market activity picked up as year-to-date unit sales remained above year-ago levels and selling prices were higher. Activity in the commercial real estate market remains elevated. Lending pipelines were satisfactory, but contacts noted softer loan demand in select categories.