Bank lending saw modest, further declines in November amid increasingly weak demand and tightening credit standards, according to the latest report of economic activity from the Federal Reserve issued Wednesday.
The latest Beige Book from the Fed, which reported information collected on or before Nov. 23, also found that economic activity across the agency’s 12 districts was “about flat or up slightly since the previous report, down from the modest average pace of growth in the prior Beige Book period,” which ended Oct. 7.
The Beige Book, published eight times a year, summarizes comments received from outside the Federal Reserve System and, the Fed notes, is not a reflection of the views of Fed officials. It collects information from a variety of business and nonbusiness sources.
Other key findings in the November Beige Book include:
- Interest rates and inflation continued to weigh on activity, and many contacts expressed greater uncertainty or increased pessimism concerning the outlook.
- Auto sales declined slightly on average, but sales increased significantly in a few Fed districts in response to higher inventories.
- Non-auto consumer spending was mixed but, on balance, eked out slight gains.
- Higher interest rates further dented home sales, which declined at a moderate pace overall but fell steeply in some areas. Apartment leasing started to slow, as well.
- Inflation pushed low-to-moderate income consumers to substitute increasingly to lower-priced goods.
- Travel and tourism contacts, by contrast, reported moderate gains in activity, as restaurants and high-end hospitality venues enjoyed robust demand.
- Manufacturing activity was mixed but up slightly on average.
- Demand for nonfinancial services was flat overall but softened in some districts.
- Residential construction slid further at a modest pace, while nonresidential construction was mixed but down slightly on average.
- Commercial leasing weakened slightly, and office vacancies edged up.