Fed Cites Business Expansion in Latest ‘Beige Book’ Report

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usiness activity continued to expand from late April through early June, the Federal Reserve said in its latest “Beige Book” report issued Wednesday, with most of the Fed’s 12 districts reporting expanded manufacturing activity.

The report, prepared by the Fed’s Atlanta district, said most districts reported that overall manufacturing activity continued to expand, although several noted that production had slowed or leveled off.

In Cleveland, a slight softening of the trucking sector reported in late winter continued through April, but demand rebounded for trucking and shipping services in May, the Fed said.

Demand was generally broad-based, though some contacts noted weaker-than-expected demand from firms in the automotive sector. “Capital spending levels were largely driven by the need to comply with coming changes in emissions regulations,” the report said.

In Chicago, trucking volumes moderated, particularly for consumer goods, and one industry analyst forecasted a pickup later in the year for that region. Trucking activity in Dallas remained strong and above year-ago levels, the Fed said.

Durable goods production was improving in the Minneapolis and Cleveland regions, though Cleveland noted that steel production was softer.

Boston and Dallas described manufacturing activity as mixed overall, and the pace of expansion, while positive, reportedly slowed in some industries, according to the San Francisco, Chicago, and Philadelphia districts.

St. Louis, Boston, Minneapolis, and Chicago cited varying degrees of weakness in vehicle production, though Cleveland reported year-over-year gains in auto production for the two-month period ending in May.

Overall, price pressures were moderate, the report said, though some manufacturers were having trouble passing on all of their increased costs. The Boston district reported "manufacturers remain quite concerned about the high costs of raw materials, energy and transport.”

Reports on real estate remained strong, though some slower activity was reported in several markets. St. Louis reported home sales continued to rise, while the Kansas City and Chicago districts said activity remained solid.

The Fed releases its Beige Book report eight times a year.