The April Federal Reserve Board Beige Report is out, and it shows an upgraded view of the United States economy. In the financial speak of the Beige report, this means that overall U.S. economic growth was moved from “modest to moderate” up to “moderate” for activity in February, March and April.
This alteration of a few words has significant meaning for American businesses and governments, which use the Beige book to chart trends and create new policies. Traditionally, the Beige Book, which is published eight times each year, is a collection of anecdotal stories that add up to a summary of economic conditions. The Book garnered economic attention in the 1980s and has been used ever since as an official source of economic data — giving those few words a high impact.
The April report noted that most areas saw increases in manufacturing activity, especially prime indicators like residential construction and automobiles, which in turn feed a variety of other industries. Hiring improved, notably in manufacturing, home construction, IT fields and professional services. Non-financial services did particularly well, with positive results in the health care industry. Marketing, consulting, legal and accounting services also did well. One of the few areas to see a decline was defense-related services, which lost business due to government efforts to cut costs.
The Beige Book news was welcome after a recent U.S. Bureau of Labor Statistics report showed that 88,000 jobs were added in March 2013, indicating growth but coming in far below analyst expectations for the month. The Federal Reserve Book showed that despite the slowing job growth, industry activity for the quarter still showed positive signs of growth.
A positive stance on the U.S. economy was further encouraged by the April Bloomberg Consumer Comfort Index, which reached a 5-year high, moving from negative 34 to negative 29.2. The jump was the largest seen in a year, and saw widespread growth in confidence among most income brackets. The boost was helped by physical signs of economic recovery available to the average consumer, such as steadily increasing stock market indexes, higher real estate prices and new marketing efforts.
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