IMGCAP(1)]
Federal Reserve districts indicated that economic activity continued to stabilize in July and August, and that the economic outlook of some businesses is cautiously optimistic, according to the Federal Reserve Board's Beige Book.
Since the last report (July 29), Dallas reported that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond and San Francisco reported signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis and New York generally described economic activity as stable or showing signs of stabilization. St. Louis reported that the pace of decline appeared to be moderating.
Most districts reported that loan demand was weak and that credit standards remained tight. New York, Philadelphia, Cleveland, Richmond, Kansas City, St. Louis and San Francisco observed further weakening in loan demand across most categories. Dallas noted scattered reports of improvements in loan demand. Cleveland, Chicago and Dallas noted an increase in demand for auto loans. Credit standards ranged from unchanged to tighter in most districts. However, Chicago reported that credit conditions and availability had improved, according to the report released today.
Mortgage activity declined moderately according to the Philadelphia, Cleveland and Kansas City districts, while Richmond reported increases attributed to improved demand for starter homes. Dallas noted an up-tick in refinancing activity.
Chicago also cited improvements in credit quality, apart from home equity and commercial real estate. Philadelphia, Richmond, Dallas and San Francisco noted further deterioration in credit quality, whereas Cleveland observed some improvement in credit quality. Dallas and Chicago noted increases in consumer bankruptcies, while New York and Cleveland reported rising delinquency rates.
Labor market conditions remained weak across all districts, according to the report, but several districts noted an up-tick in temporary hiring and a decline in the pace of layoffs. St. Louis and Minneapolis reported that federal stimulus funds have had a positive impact on construction and local government jobs. Further job cuts are expected in auto manufacturing according to St. Louis. New York cited a modest pickup in temporary hiring for the legal and financial industries.
