Fed: Economy grew ‘modestly’ in September

October 10, 2012

The Federal Reserve said the economy grew “modestly” in September thanks to boosts in housing and auto spending, according to its “beige book,” which was

released Wednesday. The report, issued eight times a year, compiles economic

observations from each of the Fed’s 12 district banks. Following are excerpts.

1
TOURISM UP

“The Boston tourism industry continues to benefit from a rebound in domestic and international business travel. . . . Leasing activity is said to be down in Boston as firms say political uncertainty makes them reluctant to make leasing commitments in advance of the national election.”

2
CONDOS STABLE

“Manhattan’s co-op and condo market has remained stable — both in terms of sales activity and prices. The upper end of the market has been relatively strong, partly fueled by foreign buyers.”

3
AUTO DEALERS HOPEFUL

“Auto dealers and real estate firms are more optimistic, as their positive trends gain traction. . . . One department store manager reported that back-to-school sales did well, cold-weather clothing is moving better than last year, and discretionary ‘fun’ items are selling well.”

4
ENERGY STEADY

“Conventional oil and natural gas production held steady during the past six weeks, with little change projected in the upcoming months. . . . Drilling rigs are migrating from other states to Ohio to take advantage of the higher-priced wet gas found in the Utica shale.”

5
DEMAND IS WEAK

“An official at a large bank described consumer demand as remaining weak, with the notable exception of auto loans, while business loans for capital equipment improved slightly. Several bankers stated that credit standards remained tight for consumer loans.”

6
HIGH CARGO VOLUME

“A Southeast port contact reported record-setting cargo volumes in fiscal year 2012, with increases across all categories. Despite the underlying increase in demand tied to replacement of aging truck fleets and the benefits of increased fuel-efficiency, new orders for heavy-duty trucks have stalled recently.”

7
HARVEST IS EARLY

“The corn and soybean harvest began a few weeks earlier than normal across the district, as plants were dry due to the drought. In some areas, late rains helped produce higher-than-anticipated yields, but these made only a small dent in the large drought-related losses. “

8
FIRMS SEE HIRING

“Firms in poultry processing, furniture, commercial printing, boat, conveyor equipment, HVAC equipment, and industrial gas manufacturing plan to hire new workers, open new facilities, or expand current operations. In contrast, firms that manufacture iron and steel products, mining equipment, and food products plan to lay off workers or close existing facilities.”

9
MORE FAIR VISITORS

“The number of visitors to the Minnesota State Fair fell just short of a record. . . . Oil and gas exploration decreased slightly in North Dakota and increased in Montana; however, North Dakota oil production hit a new record.”

10
SEDANS, CROSSOVERS SELL

“Contacts said sales were strongest for mid-sized family sedans and crossover SUVs, while sales of full-size trucks and SUVs remained weak.”

11
EMPLOYMENT STEADY

“Employment held steady or increased at most firms. Shortages of truck drivers continued to be reported in several industries. . . . Demand from the steel industry was very strong, with contracts extending through 2014.”

12
HOME DEMAND GROWS

“Home demand in the district showed continued signs of improvement, while demand for commercial real estate was largely unchanged. Although still well below its historical average, the sales pace for new and existing homes picked up further in many areas.”

Brad Plumer

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