A Better Tone To The Beige Book

The Federal Reserve's beige book, which was prepared by the Federal Reserve Bank of Dallas and based on data collected on or before April 6, somewhat reinforces the idea of a slowing rate of decline in U.S. economic activity but in no way indicates an economic recovery is set to take hold. Likely to garner the most attention is the finding that "five of the 12 districts noted a moderation in the pace of decline and several saw signs that activity in some sectors was stabilizing at a low level." No such statement appeared in the March 4 beige book, which stated that "10 of 12 reported indicated weaker conditions or declines in economic activity."

The tech sector saw a bounce in two districts: "Orders and sales of high-tech equipment firmed somewhat at very weak levels in the Dallas and San Francisco districts," although "capital expenditure plans remained on hold across most regions, and the Boston, Philadelphia and Cleveland districts noted cuts in capital budget."

Consumer spending: "Consumer spending remained generally weak. However, several districts said sales rose slightly or declines moderated compared with the previous survey period. In particular, the Boston, Cleveland and Chicago districts reported an improvement in sales."

Tourism: "Tourist spending in the New York, Minneapolis, and San Francisco districts saw double-digit declines compared with the prior year."

Housing: "Housing markets remained depressed overall, but there were some signs that conditions may be stabilizing. Many districts said factors such as homebuyer tax credits, low mortgage rates and more affordable prices led to a rising number of potential buyers. The Richmond, Atlanta, Minneapolis, Kansas City and San Francisco districts noted a modest improvement in sales in some areas."

Nonresidential real estate: "Nonresidential real estate conditions continued to deteriorate over the past six weeks. Demand for office, industrial and retail space continued to fall, and there were reports of increases in sublease space. Rental concessions were rising. ... Commercial real estate investment activity weakened further."

Banking and finance: "Most districts reported weaker loan demand overall, but the reports were mixed across loan categories. Credit availability generally remained very tight across regions."