Advisor Voices

Advisor Voices: April’s Beige Book

23 April 2019

Beige, a French word, is defined by Merriam-Webster as “a variable color averaging light grayish-yellowish brown,”—a rather large color spectrum. The Federal Reserve’s monthly The Beige Book: Summary of Commentary on Current Economic Conditions looks into economic conditions through collected anecdotal information from businesses and community organization across the 12 Federal Reserve Districts. Like the color beige, our diverse nation can present quite a spectrum at times. Below is a map of the districts with their respective major cities.

the federal reserve districts map

The most recent publication of the Federal Reserve’s The Beige Book on April 17th actually presented a pretty uniform color, with all 12 districts reporting growth at an overall slight-to-moderate pace. Consumer spending was mixed, being somewhat slower for retailers and auto dealers, but better for tourism and home sales. Manufacturing grew at a modest-to-moderate pace, and while tariffs weighed on many minds, some noted that recent progress on trade deals improved their outlook. Labor markets remain tight with employment increasing, putting pressure on wages. Finally, despite reports of higher input costs from freight, tariffs, and wages, prices only rose at a modest pace.

While not wildly exciting, April’s 32-page report is yet another sign that we may continue to see modest growth across the country. In the chart below, I have attempted to summarize the Beige Book, and add a little more “color” to the different sections that contribute to the overall health of regional economies, with green representing positive conditions, beige for mixed conditions, and red meaning negative conditions.

the beige book summary table

Just as each member of the Federal Reserve makes his or her own assessment of the report, this exercise is somewhat subjective. However, it shows a positive outlook for the economy, employment, and manufacturing. Input prices are pressuring most segments of the economy, but businesses have had difficulty passing these on to consumers, who in turn, are generally not increasing spending. With the Fed less concerned about inflation, this report is unlikely to color its decision around interest rates, which they have said should remain stable for the near-term.