ICFiles
SOC 2

content

Secure File Transfer Soc 2 starts at $1 per month

Join Us

 

content

 
Financial Calculators
Financial Calculators
 
Federal Tax Links
Federal Tax Links
 
Financial Terms Glossary
Financial Terms Glossary
 
Cartoon of the Month
Cartoon of the Month
 

How Will the July 17, 2019 Beige Book Impact the Economy?

Stock Market News

August, 2019

Buy

How Will the July 17, 2019 Beige Book Impact the Economy?

2019 Beige Book Impact the EconomyThe Federal Open Market Committee (FOMC) recently met at the close of July, bringing to light many questions on the Federal Reserve’s future monetary policy.

While there was much speculation that the Fed would lower the federal funds rate at its most recent meeting, there are many factors impacting this decision. One relevant factor is the Beige Book. Understanding what the Beige Book is and how it’s factored into the FOMC’s decisions gives us a better understanding of our economy.   

What is the Beige Book?

According to the Board of Governors of the Federal Reserve System, one survey of the U.S. economy is done through the Beige Book. Put out by the Fed eight times annually, it aggregates economic information and provides a snapshot of the U.S. economy through its 12 Federal Reserve Districts. It contains reports from each district branch and bank director, along with information gleaned from interviews with economic experts and business contacts who are familiar with the economic activity of each Federal Reserve District.     

The process to begin compiling the Beige Book starts six weeks before the next FOMC meeting. Once all surveys are completed, it's compiled and published 14 days before the FOMC meeting.

The Importance of the Beige Book

As the Federal Reserve Bank of San Francisco explains, each Book includes both formal reports and informal anecdotal information. As such, it is integral to The Federal Open Market Committee that decides monetary policy.

This report gives the current pulse on economic conditions. The Beige Book is more timely for FOMC members' decisions because statistics, such as personal income and gross state product, are published well after they were measured.  

The July 17 Beige Book covered three nationwide categories, among others: Overall Economic Activity, Employment and Wages, and Prices.

For Overall Economic Activity, highlights from the July 17 Beige Book found that between the mid-point of May to the start of July, the country saw increasing growth overall. While there was no growth in automobile sales, items sold to consumers increased. It also found the tourism industry grew strongly, especially in Richmond and Atlanta. It also revealed that home sales rose, but new residential construction saw no increase in growth.   

According to the U.S. Census Bureau, housing starts for single-family homes in June was 847,000, or 3.5 percent more than the 818,000 starts in May. Looking at building permits for single-family structures, June's permits grew to 813,000, growing 0.4 percent from May 810,000 building permits.

With regard to Employment and Wages, the July 17 Beige Book found that wages, especially for entry-level positions, and benefit packages increased their offerings due to a less than ideal selection from the labor market. Employment rolls increased, but not as fast as the previous Beige Book reported. Along with interviewed sources mentioning challenges in obtaining work visa re-authorizations, sectors such as IT, health care and construction were especially challenged in finding candidates to fill new positions.

When it came to the Prices category, there were a variety of reports and experiences in responses. Cost of many goods and services was stable or fell modestly from the last report. It also found that increased cost of labor and "input costs” due to tariffs were incurred by businesses. However, companies weren't able to push costs onto consumers due to market competition forces.

Based on the mixed data from the Beige Book and other statistical data that the Fed reviewed during its recent FOMC meeting, reverberations throughout the economy will be felt. Any new rate cuts this year could reduce the strength of the U.S. dollar, impacting the cost of imported goods and materials, further impacting businesses. However, rate cuts could similarly help reduce mortgage rates, potentially helping to spur the housing market.  

Regardless of the Fed’s decision, there will be winners and losers in the U.S. economy and beyond.

Buy

 

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

Protected by Copyscape Plagiarism Finder

Dynamic Content Powered by Service2client.com
SEO Content Powered by DynamicPost.net

ICFiles
SOC 2

content

Secure File Transfer Soc 2 starts at $1 per month

Join Us

 

content

 
 
Financial Calculators
Financial Calculators
 
Federal Tax Links
Federal Tax Links
 
Financial Terms Glossary
Financial Terms Glossary
 
Cartoon of the Month
Cartoon of the Month
 
websites

MyWeb, WordPress Joomla, Drupal
1 Click Hosting
Install free themes

websites

Click

 
Tax Calendar
Tax Calendar
 
State Tax Links
State Tax Links
 
Track your Refund
Track your Refund
 
Library Articles
Library Articles
 
 
Electronic Commerce

Copyright © 2019 Service2Client, LLC All Rights Reserved.
Terms of Service  |  Privacy Policy

SEO Content Powered by Service2Client.com


 

CLOSE