Despite continuing softness in automobile and housing-related sales, consumer spending in most areas of the country increased in October and early November, and the outlook for holiday sales was “cautiously optimistic,”
according to the latest “Beige Book” report from the Federal Reserve Board.
Manufacturing activity was positive overall, again with the weakest numbers coming from auto and housing-related producers. Demand for freight services was “disappointing” on some areas of the country, but still strong in others.
The report, based on comments from businesses collected before Nov. 20, said manufacturing activity was generally positive in most districts – especially in the high-tech industries. Manufacturers of machine tools and equipment reported strong demand outside the motor vehicle industry. Energy-related manufacturing activity was also strong. Most districts reported that orders for homebuilding materials and related equipment trailed off substantially. Production of auto and auto-related production also slowed.
The Atlanta and Cleveland districts reported “disappointing demand” for freight services, with much of the weakness coming from shipments of building materials and auto-related products. The Dallas district said transportation demand was good, but contacts there expected slower growth in coming months. The St. Louis district reported expansion in the transportation sector.
Most districts reported increased consumer spending overall, but with continued softness in vehicle sales. Most districts also reported slowing housing market activity, especially in the single-family segment. But nonresidential markets had improved some.