The Fed’s Beige Book report is based on anecdotal evidence, interviews with business experts from the Fed’s 12 regional banks. The report indicated that the pace of the economy is picking up around the country, with strong consumer spending, travel and tourism at the end of 2011 (holidays). The Beige Book is peppered with terms like “steady expansion,” “robust,” and “brisk.”
Computer demand was strong, which benefited the Kansas City and San Francisco districts. The services sector improved overall (with the notable exception of legal services losing jobs). There were notable pay rate increases for specialized workers in certain technology and manufacturing sectors. Residential and commercial real estate remained weak.
The Twelfth District – San Francisco (a district of eight Western states, including California) reported moderate pace of economic activity. Activity in the housing market remained at “very low levels,” and demand for nonresidential real estate “generally was weak.” Upward wage pressures were modest, and most businesses expect little change in the pace of hiring and wage gains next year.