National Summary
Overall Economic Activity
Reports from all twelve Federal Reserve Districts indicated that the economy expanded at a modest to moderate pace from early January through mid-February. Consumer spending expanded modestly since the last report. Retail sales increased at a subdued pace across most of the nation, with a number of Districts noting an ongoing shift from in-store to internet purchasing. Auto sales varied widely, but were said to be up in most Districts. Tourism activity was mixed but mostly stronger. Manufacturing activity accelerated somewhat, with most Districts characterizing the pace of growth as moderate. The energy sector showed modest growth in early 2017, and transportation activity was steady to somewhat higher across the nation. Home construction and sales continued to expand modestly in most Districts, while residential rental markets were mixed. Home prices were steady to up modestly in most Districts, and a number of Districts noted low inventories of existing homes. Commercial real estate construction grew modestly, and sales and leasing activity grew moderately. Lending activity was steady to somewhat higher. Businesses were generally optimistic about the near-term outlook but to a somewhat lesser degree than in the prior report.
Employment and Wages
Labor markets remained tight in early 2017, with some Districts noting widening labor shortages. Employment grew moderately in most of the nation, though three Districts characterized growth as modest and two reported that it was little changed. A number of Districts noted that staffing firms were seeing brisk business for this time of year, and one noted more conversions from temporary to permanent workers. In general, wages in most Districts rose modestly or moderately, with a few reporting some pickup in the pace of wage growth. A number of Districts noted that shortages of skilled workers--particularly engineers and IT workers--were driving up their wages, and there were also some reports of labor shortages in the leisure and hospitality, construction and manufacturing industries.
Prices
Pricing pressures were little changed from the prior report. Most Districts reported that selling prices were up modestly or moderately, though four indicated that prices had largely leveled off. Input prices were up modestly, on balance. Energy prices and farm prices were mixed but mostly steady, on balance, while prices for construction materials climbed in a number of Districts. Overall, businesses said they expected both input prices and selling prices to increase modestly in the months ahead.
Highlights by Federal Reserve District
Boston
Business contacts in most sectors reported modest to moderate year-over-year increases in activity in recent weeks. Staffing firms, by contrast, cited modest declines in revenues. Some respondents expressed concern about policy changes in the new administration and associated uncertainty. Most contacts nevertheless cited a positive outlook.
New York
Economic activity has accelerated to a modest pace. Labor markets have strengthened, hiring has picked up, and wages continued to rise modestly. Input cost increases have become more widespread, and selling prices have accelerated somewhat. Housing markets have continued to weaken at the high end, while commercial real estate markets have picked up.
Philadelphia
Overall, economic activity continued to rise modestly with pickups to growth emerging from manufacturers and homebuilders. However, activity was essentially flat in several other sectors. Many contacts remained cautiously optimistic even as their uncertainty increased. In general, employment, wages, and prices continued to rise at a modest pace.
Cleveland
Economic activity, which had picked up some after the election, continued to rise at steady pace into February. The expansion was attributed to rising consumer and business confidence, although this confidence is only reflected in a limited increase in business spending. Retaining high-skilled workers is increasingly difficult. Product pricing pressures diminished slightly.
Richmond
Economic activity grew moderately since the previous Beige Book. Manufacturers reported increased shipments, along with stronger growth in new orders and greater capacity utilization. Additionally, record volumes of container traffic passed through the ports in recent weeks. Commercial leasing increased, particularly for industrial and retail space. In commercial construction, multi-family and mixed use development dominated.
Atlanta
Economic activity expanded modestly. The labor market remained tight. Overall, wages and non-labor cost pressures were subdued. Retailers cited flat sales, while auto sales increased. Home prices increased modestly. Demand for commercial real estate continued to improve. Manufacturers noted an increase in new orders and production.
Chicago
Growth picked up to a moderate pace. Employment, wages, business spending, and manufacturing production all grew at moderate rates, consumer spending increased modestly, and construction and real estate activity rose slightly. Financial conditions were little changed, prices increased modestly, and farm incomes improved slightly.
St. Louis
Economic conditions have continued to expand at a modest pace. Manufacturing contacts reported an uptick in activity in the first quarter, while auto dealers reported a slight decline in sales. The general outlook for 2017 among business contacts remained optimistic, even improving slightly since mid-November.
Minneapolis
Economic activity grew modestly. Employment rose, but certain retail sectors saw significant closures and layoffs. Activity in North Dakota slowed, though activity in the Bakken was improving. Winter tourism conditions were spotty. Manufacturing activity and outlook improved. Commercial construction slowed, but residential construction had a strong January. Home sales were mixed across metro regions.
Kansas City
Economic activity continued to expand modestly, and contacts in most sectors expected additional gains in the months ahead. Retailers and auto dealers anticipated a pickup in sales in the next few months, and manufacturers' expectations for future activity were at their highest levels in over twelve years. The energy sector continued to expand, but the agriculture sector remained weak.
Dallas
Economic activity grew moderately, and outlooks remained optimistic. The energy sector noted improved demand and signs of a pickup in hiring. Manufacturing and service-sector activity continued to expand, although there was increased uncertainty surrounding the new administration's policy changes. Loan activity increased and housing demand remained solid.
San Francisco
Economic activity continued to expand at a moderate pace. Sales of retail goods picked up, and activity in the consumer and business services sector slowed slightly to a moderate pace. Manufacturing conditions remained mixed, and activity in the agriculture sector was largely unchanged. Activity in the housing market was unchanged from the prior period, but remained strong.