State of the State

The Fed's Beige Book economic report came out this week, highlighting economic activity in each of the Fed's 12 regions. New Jersey, as always, is split down the middle between the New York and Philadelphia offices. The New York office reports on the northern half of the state, and the Philly office on the southern half.

Interestingly, the two areas showed a marked difference in developments in housing over the past couple of months: The New York office reported a slowdown in the bottom end of the market, fueled by the end of the homeowner tax credit, but the Philadelphia office noted that the high end of the market was harder hit in its area. The New York office also reported higher credit delinquencies and tightening credit on the part of lenders. Philadelphia, by contrast, noted a modest improvement in credit quality, saying there was a definite trend of households being more careful about their debt.

Both offices reported "mixed conditions or deceleration in overall economic activity." It looks as if, here in the Northeast, the recovery will continue to be sluggish for some time.