WASHINGTON — Bankers are reporting strong consumer confidence, but economic indicators appear to be lagging, according to a report released Wednesday by the Federal Reserve.
In the central bank's Beige Book report on regional banks, a qualitative survey the agency publishes every six weeks, officials said that most districts experienced modest to moderate growth from mid-April through the end of May. But some economic activities were more robust than others; construction and home sales were up while consumer spending was down.
“Consumer spending softened with many districts noting little or no change in non-auto retail sales, while auto sales have edged down,” the report said. “Construction of new homes and nonresidential structures also continued to grow at modest to moderate rates, as did sales of existing homes. A majority of districts reported that firms expressed positive near-term outlooks; however, optimism waned somewhat in a few districts.”
Several regional banks — notably the New York, Cleveland, Chicago, Philadelphia and St. Louis — said that there was brisk demand for banks’ residential mortgage offerings, while the Richmond and Kansas Fed banks said demand for residential mortgages was mostly flat.
The New York Fed said that delinquency rates, particularly for residential mortgages, were down, while the Philadelphia Fed said that banking contacts “continued to express cautious optimism for slow, steady growth.” The Cleveland Fed, meanwhile, said that “although customer confidence remains high, that confidence has not yet translated into additional commercial or retail lending.”
Commercial real estate and industrial lending was similarly varied across regions. The Dallas Fed said that “a substantial portion” of gains in overall loan volumes reflected demand for commercial and industrial loans and CRE loans, while the Richmond Fed said that there were nascent concerns that “multifamily was nearing a saturation point” and that one Washington, D.C., lender said it harbored “worries of overbuilding in the hospitality segment.”
Demand for auto loans was down in the San Francisco and Chicago Fed districts, but auto loan demand was robust in the Philadelphia and Cleveland Fed districts. Other consumer loans, especially credit card lending, varied widely. The Philadelphia Fed noted that credit card loan volume rose year over year, the Cleveland Fed noted declines in demand and the Chicago Fed credit card loan delinquency rates had ticked up.