Fed's Beige Book Tells Uplifting Tale

When evaluating the condition of the economy, analysis of stock market performance, the jobless rate, and other key indicators is often important, but sometimes simply talking with people is enough. After all, if 400 out of 500 companies report that things are looking up, that probably means the economic outlook is promising. That is the general logic under which the “Beige Book,” a survey designed to collect “anecdotal information” from businesses before the Federal Reserve’s rate-setting meeting, operates. (Image courtesy: http://bit.ly/9I2RUV)

For the New England region, the survey revealed that most businesses experienced “stable to increasing activity in recent months,” as compared to 2009. “Some firms are hiring beyond replacement,” the report detailed, “and/or reinstituting merit-based pay increases.”

Technology companies in New England were one particularly bright spot in the report, reporting “significant increases in their business.” However, companies with international exposure reported some concerns about future business as the European dept crisis continues to unfold.

Retail stores in New England reported an increase in sales of 10%, as compared to this period last year. In accordance with this sales increase, manufactures in New England also reported increased demand, as compared to 2009.

In regards to real estate, Boston-area commercial building rents have failed to rise to even near pre-recession levels, but there has been a notable increase in leasing activity, according to the survey. As for residential real estate, the Fed predicts that home sales will remain strong in the region, despite the expiration of the federal home buyer tax credit, due to low interest rates and house prices.

At a national level, all of the Beige Book’s twelve districts reported at least “modest” growth, as compared to this time last year. (Map courtesy: http://bit.ly/bbgasn)

All things considered, this recent survey sounds very positive, particularly in regards to the Boston-area. Hopefully, for those companies in the region that the European debt crisis does adversely affect, improving domestic performance will be enough to at least maintain their current overall performance levels. As we quickly approach the mid-way point of 2010, the economy still only seems to be getting stronger.

[Sources: http://bit.ly/bzEwMm, http://bit.ly/9BKAnc]