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Beige Book suggests ‘stable but weak’ long-term economic growth
The Federal Reserve released its Beige Book Wednesday, revealing the near-term outlook for the economy was generally described as stable, or having slightly weak growth. Consumer spending was mixed, especially among general retailers and auto dealers, due to differences in prices and product offerings.
“Insights from October’s Beige Book indicate long-term economic growth will be stable but weak, owing to the fact that inflation remains above the Federal Reserve's target, and monetary policy is therefore likely to remain restrictive,” said NAFCU Economist Noah Yosif. “High rates have impacted households but not to the degree that many feared, as demonstrated by modest declines in loan demand, stable credit quality, as well as historically low delinquency rates; and could buy the Fed valuable time as it seeks additional progress on inflation.”
According to the Beige Book, prices continued to increase at a modest pace and firms expect prices to continue to increase over the next few quarters, but at a slower rate than the previous few quarters.
In addition, the Beige Book reported labor market tightness has continued to ease across the country, with most districts reporting slight to moderate increases in overall employment. Wage growth remained modest in most districts.
Banking contacts reported slight to modest declines in loan demand and consumer credit quality was generally described as stable or healthy, with delinquency rates still historically low but slightly increasing.
The Beige Book report – a Fed publication on current economic conditions across the 12 districts – is released eight times a year. The most recent report included information collected on or before Oct. 6.