Beige Book Reveals Economy In Far Worse Shape Than White House Claims
https://www.zerohedge.com/economics/beige-book-reveals-economy-far-worse-shape-white-house-claimsThere was something odd about the latest Beige book (which was prepared based on information collected on or before April 8, 2024, so before the latest CPI print): if accurate, it would suggest that the rosy economic picture painted by the White House is woefully incorrect, whether on purpose or not (spoiler alert: it is on purpose).
Reading the Beige Book, we find that contrary to the official GDP print which claims the economy is cruising at a brisk 3%, ten out of twelve Districts experienced "either slight or modest" economic growth, while the other two reported no changes in activity.
What is more concerning for the economy where spending amounts for 70% of all economic growth, the Beige Book found that consumer spending "barely increased" overall, but reports were quite mixed across Districts and spending categories:
-Several reports mentioned weakness in discretionary spending, as consumers' price sensitivity remained elevated.
-Auto spending was buoyed notably in some Districts by improved inventories and dealer incentives, but sales remained sluggish in other Districts.
-Tourism activity increased modestly, on average, which is odd considering the recent Conference Board survey found a record number of people planned on traveling abroad. Almost as if they lied...
-Manufacturing activity declined slightly, as only three Districts reported growth in that sector.
-Contacts reported slight increases in nonfinancial services activity, on average, and bank lending was roughly flat overall.
-Residential construction increased a little, on average, and home sales strengthened in most Districts. In contrast, nonresidential construction was flat, and commercial real estate leasing fell slightly.
-The economic outlook among contacts was cautiously optimistic, on balance.
Here is the Beige Book.
https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240417.pdfThe economy is in a sorry state.
