Looking at the nation’s economic picture in advance of the January 29 meeting of the Federal Reserve’s Open Market Committee, the latest Beige Book is reporting moderate consumer spending across the twelve Fed Districts, with a slight increase in commercial real estate sales everywhere.
Published eight times a year, and more formally known as Summary of Content on Current Economic Conditions, the Beige Book is valued by economists, investors, and reporters owing to its anecdotal information compiled from interviews with dozens of bankers, developers, market experts, and others commenting on general trends within their individual districts.
In the most recent edition of the publication those observers offer a decidedly mixed take on where things stood in the final weeks of 2024, with trend lines appearing to be mostly on the upside for 2025.
According to a summary of the latest Beige Book issued by the Federal Reserve, increased consumer spending in all the districts reported “strong holiday sales that exceeded expectations.” Financial service providers reported modest growth and “little change in asset quality overall.”
Construction activity saw a decline, with comments indicating that “high costs for materials and financing were weighing on growth.” Residential real estate also appeared to be sluggish as “high mortgage rates continued to hold back demand.”
Reports from the 10th District, which takes in all of Colorado and the northern half of New Mexico, saw growth in consumer spending, increased hiring, and rising construction activity. Interviewees in this district generally expressed “expectations that growth and hiring will accelerate in coming months, driven by faster consumer spending, growth in manufacturing demand, and rising construction activity.”
In the 11th District, which includes all of Texas and the southern half of New Mexico, manufacturing, bank loan volume, and homes sales were all on the upside towards the end of 2024. At the same time, those interviewed expressed concern regarding the “potentially adverse effects of future immigration and trade policies.”
In the 12th District, which takes in all of Arizona, contacts reported that wages were generally up, as were retail sales, while “demand for services related to affordable housing, food assistance, and mental health remained high.”
By and large, most respondents in all three districts expressed guarded optimism over business conditions for the first quarter of 2025, while also voicing consistent concern about the impact Trump’s soon-to-be announced tariff and immigration policies.
January 21, 2025
By Garry Boulard
