WASHINGTON—The Federal Reserve has released its first Beige Book of 2023 this week, finding relatively unchanged economic activity since the previous report.
Five Fed districts, however, did report slight or modest increases in overall activity.
Six districts, on the other hand, showed no change or slight declines, while the New York district reported a significant decline, the Fed said, noting consumer spending increased slightly with some retailers reporting a spike in sales over the holidays.
“The Fed’s latest roundup of commentary from business contacts confirms much of what is known,” stated NAFCU Chief Economist and Vice President of Research Curt Long. “Economic activity is slowing, but inflationary pressures are also subsiding.”
The Beige Book shows employment continued to see modest to moderate growth in most of the districts. Although many firms hesitated to lay off employees despite slowed demand for goods, wage pressures remained high throughout, the report found.
“Widespread layoffs would be troubling and remains a possibility, but for the time being employers are reluctant to cut staff,” added Long.
Additional Data Points
Other data points in the latest Beige Book:
- Selling prices spiked at a modest or moderate pace in most districts, although many reported that the pace of increases slowed from recent report periods
- Housing markets also weakened in most districts, likely due to elevated mortgage rates and high construction costs. Commercial real estate also slowed due to weakening in the office market, a long-term impact of the pandemic.
“NAFCU expects subdued growth in the first quarter, followed by a recovery in the spring and early summer,” concluded Long.
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