Fed Report Cites Sluggish Economic Outlook

Economic activity weakened across all 12 districts of the Federal Reserve from late August through early October, with contacts citing pessimism about the economic outlook, the Fed said Wednesday.

Trucking contacts in Atlanta indicated declines in retail, automotive, and construction-related shipments, but increases in energy and farm products, the Fed said in its “beige book” report, released eight times a year, which covered the period Aug. 26 through Oct. 6.

Atlanta manufacturing contacts expect activity to remain close to or fall below current levels over the next six months, the report said.

In the New York district, general weakness was reflected in goods distribution and one trucking contact reported that the pre-holiday season was shaping up to be the weakest in years.

Credit availability was not reported to be a major issue and truckers were getting some relief from declining diesel prices, with few so far scaling back fuel surcharges, the Fed said, though those positive industry factors were “more than being offset by the general falloff in business.”

In the St. Louis district, truck transportation manufacturing contacts cited declining demand and reported plans to lay off workers and reduce operations, while in the neighboring Kansas City, Mo., district, trucking companies noted lighter shipments because retailers planned to stock less holiday merchandise.

Demand continued to be soft for medium- and heavy-duty trucks and for manufacturers tied to housing business in the Chicago region, such as construction equipment and materials and home appliances, the Fed said.