U.S. economy continues to deteriorate; latest Fed Beige Book decidedly downbeat
Filed under: Economy
The U.S. recession has not bottomed, with almost all measures indicating further deterioration, the Federal Reserve said in its most recent Beige Book report, released Wednesday.The Fed's report shows continued downward pressure on the economy, with 10 of 12 districts reporting weaker conditions.
Philadelphia and Chicago were the exceptions, which reported regional economies that had "remained weak" but did not note a decline in economic activity. The deterioration was broad-based, with only a few sectors, such as basic food production and pharmaceuticals, appearing to escape the reduced demand affecting U.S. and global economies, the Fed said.
Outlook: Looking ahead, the Fed rated "the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010."
Credit was tight, due to rigorous lending standards imposed by lenders. Consumer spending remained weak, but the Fed did note a slight firming in spending in many districts, after what it called "very disappointing" holiday season sales.
Concerning inflation, the Fed said price pressures continued to ease across a wide spectrum of final goods and service.
Job market conditions remained weak, with rising layoffs and hiring freezes, and unemployment rising in all areas -- which reduced or eliminated upward pressure on wages.
Manufacturing activity also fell, on a net basis, in every Fed District. One bright spot: bio-pharmaceutical firms.
Real estate remained in a slump in most areas, "with only scattered, very tentative signs of stabilization reported," the Fed said.
Economic Analysis: Another decidedly somber assessment of the U.S. economy from the Fed. Outside of the biotech sector and the retail grocery business, there was almost no evidence of the recession reaching a bottom. The U.S. economy remains weak, in nearly every sector, and across the U.S., with credit conditions still constrained.
The tone of the report gives readers the impression that the Fed does not expect the recovery to start until 2010. The Fed did not explicitly state that, but one gets the sense the Fed would be very pleasantly surprised if it saw signs of a recovery in Q3 / Q4 2009.
Bottom Line: The recession continues, and it's full speed ahead with quantitative easing and other measures (including mortgage relief and legislative action) to provide large stimulus to the U.S. economy. It's going to need it.
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Reader Comments (Page 1 of 6)
3-04-2009 @ 3:11PM
BOBBY said...
I HOPE THE FAT LADY SINGS SOON. EVERYONE AT ONCE YELL UNCLE.
Reply
3-04-2009 @ 3:29PM
pete murph said...
Mr. President,
Yes and things will get worse. My boss and employer makes over $250,000 per year. He is not happy and so Im not happy.
He has cut back on spending in all areas, to offset his tax increase.
Thanks a lot.
Reply
3-04-2009 @ 3:50PM
toogeorge said...
What a "republican free market" mess.. I see another 700,000 unemployed will be praying the new man's plan works, even though the Fed seems to think we are in this for all of 2009.
Reply
3-04-2009 @ 8:39PM
Frankie D said...
Yes, toogeorge, The beatings will continue until moral improves---I mean: The taxes will increase until the economy improves.
3-05-2009 @ 4:44PM
L.A. said...
I looked in the dictionary under PIN HEAD and your picture was there!
3-04-2009 @ 4:07PM
pete murph said...
toogeorge,
It wasn't the "republicans free markets" who took out mortgages they couldn't afford, didn't understand and didn't read. Maybe, it was the democrats "housing for everybody" that got us in this mess.
Reply
3-04-2009 @ 11:59PM
Jeff said...
"Welfare for the rich" is the gimmeecrat definition of people keeping the money they earn and spending it as they wish instead of having it taken from them and given to poor dogs that can't feed themselves and decide to have 8 kids anyway.
3-04-2009 @ 4:23PM
cuervo38 said...
Let the automakers go, let AIG go and things will be fine. In fact, let the liberals go too.
Reply
3-04-2009 @ 10:59PM
Murph said...
You can throw in the bleeding heart republicans that unanimously gave welfare to the rich to a tune of over 700 billion before being voted out of office!
3-04-2009 @ 4:39PM
Joe said...
SO DO SOMETHING GET RID OF THE J W CARPET BAGGER! !
Reply
3-04-2009 @ 4:38PM
Kitty said...
You are truly a government-educated ignoramous. Your "new man" now owns this economy. This market has dropped 40% since his election, and 30% since his inaguration....based on his socialist, marxist economic polices. You see, the markets are forward looking. In fact, everytime your "new man" opens his mouth, the market drops even more.
Reply
3-04-2009 @ 4:58PM
Dixiesam said...
Amen !!! I'll keep my Guns and Money and the Obamians can keep the CHANGE.
3-04-2009 @ 4:40PM
kelly said...
gee.... ya think?!!!!!!
Reply
3-04-2009 @ 5:48PM
momof7 said...
Even the democrats in the house and senate who originally sided with Obama are getting very worried with his spending habits. I say things are going exactly as he planned all along. He was hoping to bring the U.S. down, and what better position to do it from than the presidency.
Reply
3-04-2009 @ 4:45PM
David said...
The feds already know how far the economy is going to fall. They are the cause if they would get the h.ll out of a working man and business mans way, shut up and do nothing this economy would rebound in less than2 years. These idiots are like alcoholics spending money no brains or will power.
Reply
3-04-2009 @ 4:45PM
Momof7 said...
It was the Americans who wanted McMansions on a McDonalds' salary that ruined our economy, thanks to Bill Clinton and all the other ultra-liberals who act first and think second. We don't need a president who is the equivalent of a shopaholic with a credit card, your credit card!
Reply
3-04-2009 @ 4:46PM
Cathy said...
The United States needs to go back on the gold standard to stop this economic free for all. Our economy is based on nothing without the gold standard.
Reply
3-04-2009 @ 4:55PM
Sarah said...
My huz and I are okay because he comes from a household where spending was alot sparser then it eventually became (and an expectation at that). Since he wasn't overspending on himself, it's okay to not go overboard on me. He certainly wasn't stupid enough to spend both of our incomes. We do live in a smaller home for it but that's fine. We prefer financial peace of mind, and were never out to PROVE anything to anyone nor each other. I'm loved more then any toy, mortgage or home, and since, FINALLY, we can see the clouds after decades, we are going on a walk soon to enjoy clean air, which I haven't seen in decades where we currently live.
Reply
3-04-2009 @ 4:59PM
Gary said...
You are truly a government-educated ignoramous. Your "new man" now owns this economy. This market has dropped 40% since his election, and 30% since his inaguration....based on his socialist, marxist economic polices. You see, the markets are forward looking. In fact, everytime your "new man" opens his mouth, the market drops even more.
Whoever wrote that is an ignoramous. Markets don't drop in one month, they are built or killed over years of trickle down economics.
Reply
3-04-2009 @ 5:56PM
lengua99 said...
Try checking the DOW since november. Was climbing before
the election. Maybe you're the ignoramous. And go check what
it was during the Carter disaster. He's making things worse
every day. The masses of a$$es voted for their own demise.
MARC