Beige Book notes
Today’s Beige Book report provides updated economic information collected before April 4th, 2011. Below are my highlights from the report:
- economic activity improved since last report
- Manufacturing strong
- Loan demand flat to up slightly
- Residential & commercial real estate weak
- No wage pressure
- Higher commodity costs
- Auto sales improving
- Tourism improving
- Labor markets improving. March “the best month in years”.
The takeaway: economic expansion remains in place and appears to be accelerating after a lower rate of growth in the first quarter likely caused by the spike in energy prices. Commodity prices adding some pricing pressure, but flat wages and excess capacity are keeping inflation subdued. We expect second quarter GDP growth to be stronger than the first quarter, with increasing nonfarm payrolls figures and continued progress towards lowering the unemployment rate.