Two-thirds of Fed districts report flat or declining activity, Beige Book says

By Greg Robb

Layoffs still rare, but firms are cutting worker hours

Nine out of 12 Federal Reserve regional districts reported flat or declining activity in August, according to the central bank's so-called Beige Book report released on Wednesday. That's up from five districts that reported weak conditions in the last report in mid-July.

The four districts that have experienced weaker conditions than in the prior report appeared to be Philadelphia, Richmond, Atlanta and St. Louis.

Across the country, employment held steady but consumer spending ticked down in most districts, the survey found.

Reports of layoffs remained rare but firms were reducing workers' shifts and hours and leaving advertised positions unfilled.

Manufacturing activity dropped in most districts. Residential construction and real-estate activity were mixed, with most districts reporting softer home sales.

According to the survey, prices increased modestly. Wage growth was modest, and increases in nonlabor input costs and selling prices were tame.

Looking ahead, contacts generally expected things to remain stable or improve. Contacts in only three districts anticipated slight declines.

The Beige Book survey was conducted this time by the Cleveland Fed and based on information collected before Aug. 26. The survey is designed to give Fed officials a flavor for economic conditions on the ground as they prepare for their next interest-rate policy meeting on Sept. 17-18.

-Greg Robb

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09-04-24 1453ET

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