Economic activity expanded in all 12 Federal Reserve Districts from mid-May through June, according to the Federal Reserve Bank’s latest Beige Book, released Wednesday. Activity in the St. Louis District saw “moderate” growth along with six other districts, while the Kansas City District grew at a “modest” pace, with challenges in a few sectors but an optimistic outlook for future growth.
In the Fed’s language, “moderate” is a bit stronger than “modest” as a descriptor of economic health.
Nationally, consumer spending in some districts was impaired by the stronger dollar, and it was boosted by the lower oil and gas prices in other regions. Automobile sales and tourism expanded in most regions.
St. Louis District
In the St. Louis District, business sales, residential and commercial construction, and bank lending grew steadily from the release of the last Beige Book on June 3.
St. Louis was the lone district to report on auto sales that did not see an increase in car sales. However, the district did see increased activity for auto parts and service departments, which some Fed contacts attributed to people working on old cars instead of buying new ones.
One contact in the region reported an increase in hiring for human resources positions but said the district still faced a shortage of qualified employees, especially in the commercial construction industry and information technology sector.
Rainfall damaged crops in the St. Louis region. The district saw a 16-percentage-point decline in its rate of corn crops in good or excellent condition; the same measure for soybeans was down 10 percentage points.
Kansas City District
In the Kansas City District, heavy storms in late May delayed soybean planting, but the rains also improved soil moisture for developing crop and pastures.
The district confronted pressure from a decline in manufacturing activity. Manufacturing of both durable and nondurable products fell, and the decline of nondurable products manufacturing was worse than in the same time period last year.
On the other hand, tourism grew more strongly than it did in the same period a year ago. The residential and commercial real estate market expanded, and loan demand, quality and deposit levels kept stable.