On balance, economic activity slowed since the previous report, with four Districts reporting modest growth, two indicating conditions were flat to slightly down, and six noting slight declines in activity. Retail sales, including autos, remained mixed; sales of discretionary items and durable goods, like furniture and appliances, declined, on average, as consumers showed more price sensitivity. Travel and tourism activity was generally healthy. Demand for transportation services was sluggish. Manufacturing activity was mixed, and manufacturers' outlooks weakened. Demand for business loans decreased slightly, particularly real estate loans. Consumer credit remained fairly healthy, but some banks noted a slight uptick in consumer delinquencies. Agriculture conditions were steady to slightly up as farmers reported higher selling prices; yields were mixed. Commercial real estate activity continued to slow; the office segment remained weak and multifamily activity softened. Several Districts noted a slight decrease in residential sales and higher inventories of available homes. The economic outlook for the next six to twelve months diminished over the reporting period. Labor Markets Demand for labor continued to ease, as most Districts reported flat to modest increases in overall employment. The majority of Districts reported that more applicants were available, and several noted that retention improved as well. Reductions in headcounts through layoffs or attrition were reported, and some employers felt comfortable letting go low performers. However, several Districts continued to describe labor markets as tight with skilled workers in short supply. Wage growth remained modest to moderate in most Districts, as many described easing in wage pressures and several reported declines in starting wages. Some wage pressures did persist, however, and there were some reports of continued difficulty attracting and retaining high performers and workers with specialized skills. Prices Price increases largely moderated across Districts, though prices remained elevated. Freight and shipping costs decreased for many, while the cost of various food products increased. Several noted that costs for construction inputs like steel and lumber had stabilized or even declined. Rising utilities and insurance costs were notable across Districts. Pricing power varied, with services providers finding it easier to pass through increases than manufacturers. Two Districts cited increased cost of debt as an impediment to business growth. Most Districts expect moderate price increases to continue into next year. Highlights by Federal Reserve District Boston Economic activity was flat or down slightly. Employment was stable but labor demand showed weakness. Results were quite mixed among manufacturers, some of whom have recently experienced an extended period of weak activity. Contacts noted an increase in loan defaults for office properties and expected further distress moving forward. New York Regional economic activity continued to weaken. Though still solid, labor market conditions cooled, and consumer spending slowed. Inflationary pressures were little changed after moderating in recent months. There were some signs of housing markets becoming more balanced in some parts of the District, tweet: FED BEIGE BOOK: ON BALANCE, ECONOMIC ACTIVITY SLOWED SINCE THE PREVIOUS REPORT, WITH FOUR DISTRICTS REPORTING MODEST GROWTH, TWO INDICATING CONDITIONS WERE FLAT TO SLIGHTLY DOWN, AND SIX NOTING SLIGHT DECLINES IN ACTIVITY. tweet: FED'S BEIGE BOOK: MOST DISTRICTS EXPECT MODERATE PRICE INCREASES TO CONTINUE INTO NEXT YEAR. tweet: FED'S BEIGE BOOK: SOME WAGE PRESSURES DID PERSIST, THERE ARE SOME REPORTS OF CONTINUED DIFFICULTY ATTRACTING AND RETAINING HIGH PERFORMERS AND WORKERS WITH SPECIALIZED SKILLS. tweet: FED'S BEIGE BOOK: CONSUMERS SHOWED MORE PRICE SENSITIVITY.
Bond traders ramped up their bets on an abrupt end to the Federal Reserve’s tightening cycle, pricing in the first interest-rate cut by May as a so-called “melt up” in bond prices continues. Yields on two-year Treasuries fell as much as 10 basis points on the day. Swap contracts referencing Fed meeting dates repriced to levels consistent with the policy ...