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The Fed released its Beige Book, a set of reports assessing economic activity across the twelve Federal Districts, late in the trading day. The overall economy is adjudged to be growing at a ‘modest to moderate pace’, which tallies up with the verdict from the last Beige Book, but digging in amongst the detail, things appear to be a little more cheerful than the report in June.
Housing continues to be an area of strength, with most districts reporting both rising home sales and prices. Increased consumer spending was also common across most districts, with the notable exception of the New York District. Manufacturing is reported to have picked up, supported by strong demand in residential construction in some areas, and the strength of autos in the Midwest.
Banking conditions were broadly robust, and employment was steady, with wage pressures well-contained. Generally, inflation is reported to have been stable or slight, although price increases in construction materials were noted in several districts.
Given the suggestion of inflation remaining cool, growth no more than moderate, with no great advances in the labour market, I would think the Beige Book’s findings do not lend weight to an early scaling back of the Fed’s asset purchases.
Meanwhile the second-quarter earnings season continues at a fair clip. After the market shuts tonight we will hear from a contingent of high-profile companies, including IBM, American Express, eBay and Intel.