Regional economic activity is increasing, consumer spending is up, tourism activity is growing, and home sales are improving across the country, according to the Federal Reserve.
Employment is increasing and wages are moderately higher, too. Those are among the trends cited in the Fed's third Beige Book of the year, which collects observations on current economic conditions from the Fed's 12 regional banks.
The New York Fed reported that hotels and restaurants in the northern part of the state got a boost from the April 8 total solar eclipse as people traveled there from other locations to see its full effect. Tourism grew more moderately in New York City, which wasn't in the zone of totality. More districts could report on eclipse economic effects in the next Beige Book.
Most districts reported that the labor supply and quality of job applicants increased, and several said employee retention had improved, while others noted that some companies were cutting staff. Despite a higher labor supply, many districts reported "persistent shortages of qualified applicants" for certain jobs, including machinists, trades workers, and hospitality workers.
For all the hand-wringing about when and how often the Federal Reserve might lower interest rates to tame inflation, price increases observed by the regional banks were "modest, on average."
Violence in the Red Sea and the March 26 collapse of Baltimore's Francis Scott Key Bridge caused some shipping delays, but no widespread price increases. Most said they expect inflation to hold steady at a slow pace moving forward.
Businesses and homeowners in several districts reported big jumps in their insurance rates. Some companies said their ability to pass along higher prices to consumers had "weakened considerably in recent months," leading to smaller profit margins.
The St. Louis Fed saw a modest uptick in consumer spending, which which it and the Chicago Fed attributed to an earlier Easter holiday. The Philadelphia Fed said people are trading down and buying cheaper items to compensate for higher prices. The Atlanta Fed also said shoppers are price-sensitive and doing less discretionary buying.
As for travel and tourism, the Boston Fed said convention and tourism activity was robust, the Richmond Fed reported higher hotel occupancy and "strong" future bookings, and the Atlanta Fed said "appetites for cruising increased," with strong passenger counts at Florida ports.
The Beige Book was prepared for the Fed's next meeting scheduled for April 30 to May 1.
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