Current Economic Conditions by Federal Reserve District
Reports from most of the twelve Federal Reserve Districts indicated that overall economic activity continued to expand at a modest to moderate pace in June and early July. The Atlanta, St. Louis, and San Francisco Districts reported modest growth, while Boston, Chicago, Minneapolis, Kansas City, and Dallas described economic activity as advancing moderately. The New York, Philadelphia, and Cleveland Districts noted that activity continued to expand, but at a slower pace since the last report, while Richmond cited mixed activity.
The Eleventh District (Dallas)
The Eleventh District economy grew at a moderate pace over the past six weeks. Overall manufacturing activity continued to expand. Demand for business services remained solid, and transportation services activity increased. Respondents said retail sales grew at a somewhat slower pace than the last report, and automobile sales held steady. The housing sector continued to improve, and commercial real estate leasing activity held steady. Financial firms noted mixed loan demand. Overall energy activity remained strong, although gas-directed drilling continued to decline. Agricultural conditions deteriorated slightly. Employment levels were steady to slightly higher, and prices were mostly unchanged. Wage pressures remained minimal. Outlooks across industries were generally positive, but some respondents expressed concern about European debt issues, U.S. political uncertainty, and healthcare costs.
Construction and Real Estate
Contacts in the single-family housing industry said demand picked up over the past six weeks. Respondents noted that demand was outstripping supply in some areas, leading to falling inventories. Construction activity was picking up as result. Realtors and builders remained cautiously optimistic. Apartment market respondents continued to report solid demand. While rental rates continued to rise, the pace slowed slightly. Apartment construction activity is expected to pick up in coming months.
Commercial real estate leasing activity remained steady since the last report. Energy and technology sectors continue to drive demand for space, particularly in Houston. Contacts were optimistic but remained concerned about the pace of U.S. economic activity.