Reading Between the Lines of the Beige Book
The stock market may be providing a bit of relief today but don't let that fool you. The Federal Reserve is here to make sure that any whiff of optimism in the air is swiftly extinguished.
The central bank released its latest Beige Book, which includes information from the twelve regions as of February 23, and it ain't pretty. Beige is like ennui. Today's report is more like despair. It's the Beige Book in a new shade of gray.
We'll spare you the ugly details about the overall weakening economy, rising unemployment, and general malaise in the retail sector. Instead, we'll offer up the most optimistic passages, which can give you a good idea just how gloomy the rest of the report is.
As reported by Richmond, Chicago, and San Francisco, discount chains fared much better than traditional department stores and specialized retailers, recording sales gains in many cases as consumers continued to switch away from discretionary spending and luxury items and toward basic necessities.
Translation: Toilet paper and rice are selling like gangbusters.
Reports of gains in retail spending were largely limited to grocery stores and pharmacies, although reports from Philadelphia, St. Louis, and Richmond indicated some pickup in sales of apparel, which the latter District attributed in part to severe winter weather.
Translation: Not only are we poor and unemployed, but it's so friggin' cold this winter we've had to buy more sweaters.
However, Dallas noted a modest increase [in business services], albeit less-than-expected, in demand for legal services due to increased bankruptcy proceedings.
Translation: You still have to pay someone to lose it all.
Providers of information technology (IT) services in the Boston District saw a drop in activity on average, although some firms have sustained strong revenue growth; activity among providers of IT services was reported as stable to up in Kansas City, and Minneapolis reported that some IT services firms have seen solid demand from companies that are intent on using the technology to reduce costs.
Translation: Fire ten people, hire another computer. It really works!
Manufacturing of biotechnology products and pharmaceuticals was one bright spot, with Boston reporting sales gains at a double-digit pace for biopharmaceutical firms, Richmond noting continued hiring of temporary staff among life sciences and pharmaceutical companies, and Chicago reporting continued strong demand for pharmaceuticals.
Translation: No longer able to afford weekly therapy visits, we've resorted to increased dosages of anti-depressants
Boston and Cleveland reported that loan demand and the availability of funds were more favorable for community banks than for institutions with a national scope.
Translation: Don't believe what the bankers say on Capitol Hill.
by Megan Barnett
Related LinksA Nation of StaycationersFuture of Green IT: Beating the HeatFuture of Green IT: Greenbacking Green
Presented By:
Kingdom of the Blue Whale – Sun Mar 8 8P
Blue whales are the planet’s largest creatures, yet we hardly ever see them. Their calls travel thousands of miles, but we can barely hear them. Now, National Geographic embarks on a mission to witness what nobody ever has in these waters; blue whales eating and giving birth.Click to Learn More natgeotv.com/bluewhale
