Beige Book: West Coast economy weakens further
Pacific Business News (Honolulu)
Economic activity on the West Coast and in Hawaii weakened “decidedly” during the survey period of mid-October through late November, according to the latest Beige Book issued by the Federal Reserve Bank of San Francisco.
The report, released Wednesday, said retail sales deteriorated further, demand continued to fall for most services, manufacturing activity slowed, demand for real estate remained weak and financial institutions reported weaker loan demand and restricted credit availability.
Upward pressures on prices moderated during the period, the report said. Prices for energy and selected commodities fell, including food products and raw materials.
Upward pressures on wages disappeared and job cuts and hiring freezes were reported across a range of industries.
Retailers saw weak sales and expect significantly weaker holiday spending than in previous years. Spending on discretionary items such as furniture, household appliances and jewelry declined. Discount chains continued to fare batter than traditional department stores.
The Fed said travel activity fell in major destinations. Southern California reported a rising incidence of canceled corporate meetings, while tourist visits and spending have dropped sharply in Hawaii. Restaurants have reported declines in business. Some have closed and more are expected to close in coming months.
The district’s housing markets remained weak and demand for commercial real estate eroded.
Banks reported that lending activity and credit conditions weakened significantly during the period. Demand for commercial and industrial loans continued to fall, and demand for new residential mortgages remained at low levels.
Loan delinquencies and credit losses rose moderately during the period.
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