WASHINGTON (MNI) – The following is the second and final section of
the summary of the Federal Reserve’s Beige Book survey of economic
conditions in the 12 Districts, prepared by the Minneapolis Bank on
responses up until Nov. 18, published Wednesday:
Agriculture and Natural Resources
Districts mostly reported favorable agricultural conditions.
Harvests were ahead of pace or completed in Richmond, Atlanta, Chicago,
Minneapolis, and Kansas City. The corn harvest was even with last year
in Chicago and Minneapolis, while soybean production decreased. Wheat
production was down dramatically in parts of the Minneapolis District.
Corn and soybean yields were above average in the northern portions of
the Kansas City District, but drought conditions severely cut crop
production in the Districts southern regions, and the winter wheat
crops were in poor to fair condition. The severe drought in the Dallas
District continued but eased slightly. Prices for most agricultural
commodities except soybeans remained above year-earlier levels, and farm
income increases were reported by Chicago, Minneapolis, and Kansas City.
Export demand remains strong for agricultural products, particularly
meat, but Dallas reported a recent decrease in demand for grain exports.
Activity in the energy and mining sectors increased since the
previous report. Cleveland, Minneapolis, Kansas City, Dallas, and San
Francisco saw increases in oil exploration. Cleveland and Dallas also
reported growth in shale gas extraction. Coal production was flat in
Cleveland and decreased slightly in St. Louis, though it is still up for
the year. Minneapolis reported that more wind energy projects were
planned. Mining activity increased in San Francisco and remained at
elevated levels in Minneapolis.
Employment, Wages, and Prices
Hiring was generally subdued, but some firms with open positions
reported difficulty finding qualified applicants. Stable employment
levels or subdued hiring were mentioned by New York, Philadelphia,
Cleveland, Atlanta, Chicago, and Dallas. Assessments of labor market
conditions were mixed in Richmond and St. Louis, while labor markets
showed some signs of reduced availability of labor in Minneapolis. In
Boston, demand for workers at services firms grew, but hiring among
manufacturers was limited. In Kansas City, hiring plans among
manufacturers remained solid, while expectations of future hiring among
manufacturers in Philadelphia nearly doubled. Meanwhile, Boston,
Philadelphia, Cleveland, Richmond, Atlanta, and Minneapolis noted that
some firms looking to fill open positions were having difficulty finding
qualified workers, particularly for high-skilled manufacturing and
technical positions. Atlanta noted there was growing concern that the
skills of the unemployed were deteriorating.
Wages and salaries remained stable across Districts, although some
exceptions were noted. In Cleveland, wage pressures emerged for truck
drivers as the pool of available drivers shrank relative to job
openings. Manufacturing wage growth strengthened in Richmond, while
hiring stabilized and the average workweek was unchanged. Some wage
growth was noted among the highly skilled trades in Atlanta. In
Minneapolis, wages increased sharply at some fast food restaurants in
western North Dakota. Kansas City reported that some energy and
information technology firms raised wages for skilled workers; Dallas
reported the same for airlines and a few construction-related
manufacturers. San Francisco noted persistent upward pressure on benefit
costs, especially for employee health care.
Overall price increases remained subdued, and some cost pressures
were reported to have eased.
Boston, Atlanta, Chicago, and Kansas City noted a moderation in
input cost pressures. In Cleveland, manufacturers reports on changes
in raw materials prices were mixed; the transportation sector noted
higher prices for tires, parts, and equipment; and fuel prices exhibited
some volatility. Richmond reported that raw materials, retail, and
services prices grew at a somewhat faster pace. Restaurants in Kansas
City expected higher menu prices due to rising food costs. In Dallas,
prices for new cars rose slightly, and staffing and legal services firms
noted modest increases in billing rates, but natural gas prices remained
low. San Francisco reported a recent uptick in the prices for energy
inputs, particularly oil, and for assorted food items at the retail
level. Atlanta noted that most businesses had limited ability to pass on
increases in input prices from earlier in the year.
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** Market News International Washington Bureau: 202-371-2121 **
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