The Federal Reserve Bank’s Beige Book for June reports modest economic growth for the St. Louis region and mixed conditions across the Kansas City region. The Beige Book, a regular report of anecdotal economic information from the central bank’s 12 districts, was released online Wednesday.
St. Louis was one of six districts that reported modest growth, along with Chicago, Minneapolis, Cleveland, Atlanta, and Philadelphia. Kansas City saw increases in wages, commercial real estate and home sales, but reported decreases in manufacturing and transportation-related spending and activity.
Both of Missouri’s districts reported a decrease in coal production as low prices for the commodity continue to hammer the coal industry. Both regions also dealt with uncertainty about profitable prices for crop and animal products.
The eighth district, which includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee, saw an increase in residential and industrial construction in the period between the Fed’s April and June reports. More than two-thirds of hiring managers in the region said they had raised salaries and wages more than in recent years in an attempt to attract and retain employees, according to the report.
The Beige Book says that half of the Fed’s contacts in the district reported slightly higher wages than in the last three months, and one-fifth of the contacts reported slightly higher employment and prices. Contacts in the region reported that some job vacancies during the period were the result of few applicants or applicants lacking necessary qualifications and skills.
Additionally, St. Louis saw modest growth across nonfinancial services. Contacts reported slight increases in general retailers and an uptick in auto sales. The outlook for manufacturing in the region was weaker than in April’s report, but it still showed signs of improvement.
The tenth district, which includes all or parts of Colorado, Kansas, Missouri, Nebraska, New Mexico, Oklahoma and Wyoming, reported a sharp increase in the hospitality and tourism industry, though some contacts expected this to weaken in coming months. The Fed’s contacts in the district also reported that while the region saw an overall decrease in manufacturing output, the outlook for future improvement was positive.
The tenth district reported a labor shortage of commercial drivers, skilled technicians, and entry-level employees. Many contacts in the district said that there was a slight increase in wages across industries, and many expected this trend to continue.
Several industries in the Kansas City region reported slight increases in wages with that trend expected to continue. Retail prices in the region have also increased. There was a notable increase in sales of lower-priced products and poor sales for luxury items. Additionally, home sales were strong in Kansas City. However, auto sales declined.
Overall, districts across the country mostly indicated increases in consumer spending, modest growth in nonfinancial services and slight growth in employment. America’s energy sectors remained economically weak, and while crop conditions were promising in many districts, commodity prices remain an issue for farmers and producers.