Thursday, April 15, 2010

Stories from the Fed

The Fed's most recent Beige Book report, its eight-times-a-year look at economic conditions around the country, came out yesterday, and confirmed what we've been talking about here for the last few weeks: retail sales appear to be driving the recovery. All around the nation, the Fed found increases in both retail and car sales, while other areas of the economy remain flat - or in the case of the banking sector, downright scary.

Retail sales were reportedly "strengthened" in the New York region, covering the northern half of New Jersey, while Philadelphia and the southern half of the state saw "slight sales gains." (The inexact terminology results from the fact that the Beige Book relies almost entirely on anecdotal evidence.) In New York, merchandise sales were reported as up 10 to 13 percent over the previous year for March, which certainly gibes with other retail reports we've seen. Both areas saw "improved" vehicle sales.

Commercial real estate continues to be slow; in Manhattan, office rents were down 20 to 25 percent from the previous year. In a rare note specifically about our state, the Beige Book notes that home sales are still sluggish but appear to be rebounding somewhat in northern New Jersey, particularly in resales (as opposed to new homes), and for more moderately priced homes as opposed to higher-end properties.

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