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Fed Beige Book: Economic activity slows

According to the Federal Reserve’s Beige Book, “economic activity slowed since the previous report.” The report was prepared based on information collected before November 18.

The Beige Book mentions that demand for labor continued to decline and price increases largely moderated.

Main conclusions of the Beige Book:

economic activity remained stable or declined slightly overall, as prices remained mostly stable and demand for labor slowed. Retail results were mixed but neutral overall, with restaurant sales falling slightly.

From the manufacturing sector reported a modest decline in recent profits and some experienced sharp declines in demand from a year earlier. Staffing services saw a slight increase in profits but saw a slowdown in their clients’ hiring plans.

Residential home sales remained at very low levels and are not expected to rebound until interest rates fall. Commercial real estate activity slowed slightly, and the outlook for office real estate was increasingly bleak. Outside the real estate sector, contacts were generally cautiously optimistic about at least stable activity in the future.

The job appeared stable overall, but hiring activity and hiring plans slowed markedly in some sectors. Wage growth was moderate on average and declined further overall.

The prices are stable on average in the First District.

Market reaction

The dollar slightly trimmed its gains following the release of the report and stocks hit new highs on Wall Street. The Dollar Index erased the gains and is around 102.65, after losing strength during the American session.

Source: Fx Street

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