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Consumer Spending

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The federal Reserve Bank publishes a report called the Beige Book eight times a year that summarizes the current economic conditions in each of the 12 bank districts. This report is used by the Federal Open Market Committee wwhen deciding on monetary policy. Go to www.federalreserve.gov/fomc to read the most recent Beige Book and answer the following questions.

1) Report the recent conditions of consumer spending, labor markets, wages and priaces, and industrial activity.

2) What is the most recent monetary policy action taken by the FOMC

3) Based on your answer to b what monetary policy action do you recommend the FOMC take at its next meeting

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Consumer Spending is analyzed.

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1. Consumer Spending
Reports on retail sales in most Districts were generally positive. Sales were generally above expectations in New York, but they were below expectations in Cleveland. Apparel and spring merchandise were strong sellers, while some Districts noted weak demand for home goods. Overall, contacts in Cleveland and Kansas City expect positive sales growth in the next few months, while the outlook in Boston, Philadelphia, and Dallas is more cautious.

Reports on vehicle sales were mixed among the Districts. Sales improved recently in Kansas City and Philadelphia. Recent sales were slow in Chicago, mixed in Atlanta, flat or slightly slower in Richmond, and mediocre in parts of the Minneapolis District. Recent demand for used cars was strong in parts of the St. Louis, Minneapolis, and San Francisco Districts, while new car sales improved in Cleveland in March. Auto dealers in Minneapolis and Kansas City have an optimistic outlook for the upcoming months.

Labor Markets
Most Districts reported continuing tight labor market conditions, especially for skilled occupations, although several Districts reported expansions in employment levels. There were reports of tight labor market conditions or worker shortages in some areas of the New York, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, and Dallas ...

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