Economic conditions in the Federal Reserve Bank’s Kansas City and St. Louis districts improved modestly from mid-May through the end of June compared to the previous six weeks, and prospects for most economic sectors in the regions remain positive, according to the Federal Reserve Bank’s latest Beige Book report.
The report, which offers an anecdotal assessment of economic conditions in each of the Fed’s 12 districts, was released Wednesday.
St. Louis district
Although some employers in the Fed’s eighth district reported a shortage of qualified applicants, employment growth remained modest. Difficulty attracting employees resulted in wage growth, particularly in the manufacturing sector.
General retail sales continued to grow modestly in the region. The manufacturing, construction, service and real estate sectors grew alongside retail sales in the area.
Firms that manufacture motor vehicles, wood products and beverage products reported plans to build new facilities and hire new employees. Construction activity, driven by high demand, improved moderately.
Rising loan demand in the district indicates higher confidence in the economy. Real estate lending increased 18 percent from this time last year. Commercial and industrial loans increased 27 percent, and individual loans increased by more than a third over the period.
Kansas City district
Wages in the 10th district continued to grow and are expected to increase in the next few months. Some employers reported a shortage of commercial drivers, production workers and skilled technicians.
Moderate growth was seen in retail sales, especially in promotional items and summer outdoor products. Auto sales, however, remained below 2015 levels. The tourism industry has reported robust growth since May and remained above 2015 levels.
Real estate activity and loan demand expanded moderately in June and is expected to grow in the next few months.
Due to the falling number of active oil and gas drilling rigs, local firms expected oil prices to increase slightly by the end of this year.
Farm revenue picked up due to rising corn and soybean prices, which somewhat relieved the farm financial stress.