WASHINGTON (4/18/13)--The Federal Reserve's 12 district banks reported that "overall economic activity expanded at a moderate pace" from late February to early April as housing and auto manufacturing improved, said the Fed's Beige Book released Wednesday.
That compares to the "modest to moderate" growth the Beige Book reported in January and March. The report, compiled by the Federal Reserve Bank of Dallas, describes current economic conditions in each district.
The report is no surprise and doesn't suggest any change will occur in quantitative easing--the Fed's policy of buying back $85 billion in bonds every month--at the April 30-May 1 Federal Open Market Committee meeting, Maninder Sibia, an economist at Contingent Macro Advisors said (MarketWatch April 17).
Five districts--Cleveland, Richmond, St. Louis, Minnesota, and Kansas City-- described the economy as growing at a "moderate" pace. Five others--Boston, Philadelphia, Atlanta, Chicago and San Francisco--noted "modest" growth. New York and Dallas said expansion was reported "accelerated."
The districts reported increases in manufacturing activity, namely residential construction and automobiles; moderate increases in the demand for nonfinancial services; rising home prices; and rising home sales in most districts. Employment conditions remained unchanged or improved somewhat, with hiring most prevalent in manufacturing, residential construction, information technology and professional services. Wages were generally contained.
"Loan demand was steady to slightly up at most district banks that commented on lending," said the Beige Book. "The Philadelphia District, however, said loan volumes softened somewhat since the previous report." New York noted widespread increases in loan demand, especially commercial loans and residential mortgages. Cleveland said business and consumer loan demand picked up since the last report.
Dallas "saw broad-based improvement in loan demand as energy-related lending remained strong and commercial real estate and home equity lending bounced up from low levels." San Francisco said "increased growth in automobile and mortgage loans spurred overall improvements in loan demand." Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Dallas and San Francisco noted loan pricing was very competitive."
Mortgage lending reports were "mostly favorable" with stronger refinancing activity in New York and Atlanta. Cleveland and Kansas City reported a shift from mortgage refinancing to new purchases. New York, Richmond, Dallas and San Francisco saw an uptick in residential mortgage loans.
Most districts' banks said credit conditions remained favorable, with improved credit quality for business and consumer loans. For the full report, use the link.