The Fed’s Beige Book released today, a regional economic survey done across the Fed’s 12 districts, showed that housing weakened or remained soft and that there was a general pullback in hiring up until August 25. Because of the slowdown, the Fed shouldn’t have a reason to hike rates before the end of the year. According to a Bloomberg report on the Beige Book:
John Ryding, a former Fed economist who now runs RDQ Economics LLC in New York, said in an interview with Bloomberg Television: “We could see the economy languishing or move further south and at the same time see inflation pressures remain elevated — and that’s stagflation.”
…The previous Beige Book, released July 23, reported “elevated or increasing” price pressures amid slower economic growth. Five districts indicated “a weakening or softening” in their economies, and consumer spending was “sluggish or slowing” in every region. Today’s report said labor markets were “unchanged or somewhat softer” across most of the country, compared with the last Beige Book.
…The Beige Book’s regional anecdotes are gathered through hundreds of telephone calls, news clippings and personal contact by the staff of the 12 Fed banks, whose districts cover all 50 U.S. states. The anecdotes are designed to supplement quantitative forecasts of the Board of Governors staff.
Tomorrow and Friday we will get a firmer grasp on the employment situation when ADP and BLS payrolls are released respectively. The Bureau of Labor Statistics report is the official report, and as of July showed that the economy has lost 463,000 jobs. August predictions call for 75,000 job losses.