Beige Book Provides Gloomy Outlook for U.S. Economy

Beige Book’s Bidenflation Problem

There’s a running joke in Breitbart’s virtual newsroom that some of the most interesting economic news comes from the “Beige Book,” the blandest-named book imaginable. I don’t know who the Beige Book brand manager is, but they should be put on the unemployment line.

of beige book is a report produced and published eight times a year by the Federal Reserve System based on data and interviews from each of the 12 regional Fed banks. One particularly interesting aspect is that it includes qualitative as well as quantitative information. This allows astute readers (and investors) to spot trends in economic conditions that cannot be easily summarized in charts and graphs.

The Fed, not known for its marketing acumen, gave the report a boring name, but we always get excited when we get our hands on it. And to my great pleasure, There was one today.

The key points are:

— “Overall economic activity has generally expanded slightly since late February. 10 of 12 districts experienced either slight or moderate economic growth“This is an increase from eight in the previous report, while two others reported no change in activity,” the report states.

– but! Many school districts reported that Americans are becoming stricter regarding discretionary spending. Increasing susceptibility to Bidenflation.

— indicated in some districts car loan demand However, this is not a sign of economic strength, but rather that dealers have too much inventory and are trying to get rid of some of it.

home sales They’re up in most quarters, suggesting more Americans accept that interest rates are likely to remain high through 2025. Therefore, there is little incentive to delay the purchase. There is also a seasonal component to this data, as people are less likely to be house hunting in the winter.

— Prices rose modestly overall, but ominously, the Fed specifically pointed out that: chaos in the red sea And that Collapse of the Key Bridge in Baltimore was do not have Main factors at the moment. Companies surveyed by Beige Book said they were concerned that price increases, particularly related to port closures, could be delayed and that price increases could occur when the next survey is conducted.

— One of the most alarming details companies shared is that as it becomes more expensive to bring products to market, it is becoming increasingly difficult to pass the increased costs on to consumers. was. In other words, Americans have reached their limit.. Therefore, companies are likely to see lower profit margins in the next survey period, otherwise inflation data would accelerate. This detail gave the report an ominous tone.

— most districts reported increase in labor supply. This is not surprising given current (illegal) immigration levels. Related to this, and even more worryingly, many districts are reporting a lack of applicants for skilled labor positions. This dichotomy is bad for workers and managers alike.

wage growth is at “pre-pandemic” levels, which also means pre-Bidenflation levels. It’s not enough.

insurance premium rate Businesses and homeowners rose in several areas.

— Bidennomics is causing problems for the world nonprofit sector.

— Bidenflation is having some effect Service reduction.

Wall Street catches up with Breitbart

Meanwhile, Wall Street and some establishment media came Some of the conclusions we drew in yesterday’s Breitbart Business Digest. Rate cuts will likely occur in late summer or later.there may be no cuts at all this year.

Traders work on the floor of the New York Stock Exchange (NYSE) on April 10, 2024 in New York City. (Spencer Pratt/Getty Images)

But others in traditional news outlets seem to be trying to ignore their ideas.

What’s wrong with US inflation?“Prices remain high because of Powell’s pivot to housing shortages and rising energy prices,” reads the top headline Wednesday afternoon on Their list of major causes of inflation clearly excludes the trillions of dollars of unnecessary government spending by Joe and the Democrats. Or, as I said in my article, new york times best selling books defeat biden, “Everything Joe touches becomes expensive.”

We are in an election cycle where the current administration will spin out all the data that suggests the economy is in a stronger position than it actually is. So be careful with that. But if Team Biden were honest, they would admit that this edition of the Beige Book offers: There are far more red flags than silver linings..