Beige Book

The Lehmann Letter (SM)

Here’s the Fed’s Beige Book summary for the past six weeks. It’s based on reports from business and community sources throughout the nation. You can find it at:

http://www.federalreserve.gov/fomc/beigebook/2010/20100609/default.htm

“Economic activity continued to improve since the last report across all twelve Federal Reserve Districts, although many Districts described the pace of growth as "modest." Consumer spending and tourism activity generally increased. Business spending also rose, on net, with employment and capital spending edging up but inventory investment slowing. By sector, nonfinancial services, manufacturing, and transportation continued to gradually improve. Residential real estate activity in many Districts was buoyed by the April deadline for the homebuyer tax credit. Commercial real estate remained weak, although some Districts reported an increase in leasing. Financial activity was little changed on balance, although a few Districts noted a modest increase in lending. Spring planting was generally ahead of the normal pace, while conditions in the natural resource sectors varied across the Districts. Prices of final goods and services were largely stable as higher input costs were not being passed along to customers and wage pressures continued to be minimal.”

The key phrase: “…….many Districts described the pace of growth as "modest."

We’re slowly pulling ourselves out of the ditch. That’s what’s holding back the stock market , and everything else. The recession is over, but this recovery will be weaker and more protracted than many hoped.

© 2010 Michael B. Lehmann