Beige Book: US activity continued to expand modestly in final 6 weeks of 2019
Comments in the Beige Book
- Holiday sales were said to be solid, with several Districts noting the growing importance of online shopping
- Near-term outlook remained modestly favorable across the nation
- Consumer spending grew at a modest to moderate pace
- Manufacturing activity was essentially flat
- In many districts trade and tariff uncertainty continued to weigh on some businesses
- Wage growth was modest to moderate in most districts
- Employment was steady to rising modestly in most districts
- Labor market remained tight but a number of districts reported job cuts or plans to cut in manufacturing
- The Dallas and Richmond Districts noted above-average growth, while
Philadelphia, St. Louis, and Kansas City reported sub-par growth
- Prepared by the New York Fed with data collected on or before Jan 6
- Full report
That doesn't sound like an economy where the stock market has risen 15% since October. At some point there needs to be a pickup in growth to justify the expectations that markets have built in.
I dug through the report for any clues on holiday retail sales ahead of tomorrow's report. Cleveland, KC and Dallas were upbeat but New York and St Louis were more pessimistic. In general there was some optimism but it wasn't on the level you might expect. A consistent theme was the shift to online and that isn't a big surprise but might be accelerating and it could be hurting brick-and-mortar.