The Federal Reserve's Beige Book revealed all 12 central bank districts saw weakening economic activity in the previous six weeks. However, the detailed report released Wednesday said five districts reported the pace of economic contraction was moderating.
The manufacturing sector continues to suffer in most areas of the United States. Still, the Chicago and Kansas City districts reported that falls in production had begun to slow, while Cleveland's report showed that drops in new orders were stabilizing. The New York and Dallas regions said falling demand was beginning to bottom out.
The pharmaceutical industry in Boston and Chicago Fed regions saw solid demand and in the Dallas region, orders for petrochemical products are rising.
The U.S. real estate industry saw some small signs of improvement as well. While most districts reported depressed conditions, low mortgage rates and home prices meant some regions were reporting more buyers.
An improvement in home sales was registered in the Richmond, Atlanta, Minneapolis, Kansas City and San Francisco area reports.
The nonresidential real estate industry, however, was weak across the board.
There was an increase in home loan demand in Kansas City, New York and Richmond regions. However, most areas reported meager demand for loans, and increasingly strict requirements for commercial loans.
As for the labour market, the report read, "reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread across Districts."
The only bright spots were isolated improvements in healthcare employment
In agriculture, most areas reported improving planting and harvesting conditions, save the Dallas and San Francisco area which are experiencing drought. Severe losses for dairy farmers in the Chicago and Dallas districts were also reported.
All districts reported downward pressures on prices.
All the data in the report was taken on or before April 6.
In the last Beige Book, ten out 12 districts reported deterioration in economic activity, with only the Philadelphia and Chicago regions saying conditions "remained weak." The survey was based on data taken before February 23.
The Beige Book is the central bank's summary of economic news over roughly the past six weeks from the 12 Federal Reserve Bank districts. The Fed's monetary policy committee looks to the compilation of comments by regional Fed banks to get a non-numerical picture of economic conditions across the country.
By Megan Ainscow and edited by Ernest Hoffman
©CEP News Ltd. 2009