The following excerpts are from the Oct. 24 Current Economic Conditions, or Beige Book, which describes economic activity in the Ninth District since Sept. 11. The Beige Book is produced prior to each Federal Open Market Committee meeting.
Construction and real estate
Construction activity in the district is down from a year ago. Leasing and sales for office building space were significantly down in September compared with a year ago in the Minneapolis area. ... However, ... commercial construction activity [in Fargo, N.D.] did not slow down during September and early October.
Consumer spending and tourism
Retail sales are about the same as a year ago. ... A North Dakota mall manager reported about average sales for this time of year. In Montana, a mall manager reported that while luxury items, such as jewelry, are down, recent sales of many low- to mid-priced products are higher than a year ago.
Manufacturing
Overall manufacturing activity is slightly down, but conditions vary across the district. ... [A] Minnesota electronic control producer is reducing production. A data storage plant in North Dakota is expanding production. A farm equipment manufacturer will close a factory in Minnesota and transfer production to a South Dakota plant. An Upper Peninsula medical equipment maker plans to expand its manufacturing facility.
Mining and energy
Activity in the energy sector is level, while mining production decreased.
Agriculture
Agricultural conditions have deteriorated across the district. The harvest for many district crops is behind last year.
Employment, wages and prices
Airlines and other travel-related industries have reported layoffs since Sept. 11. A major Minnesota-based airline will cut 10,000 jobs company-wide (4,500 jobs in Minnesota), a smaller carrier plans to reduce staff by 250 jobs, and an affiliated travel company will cut 150 jobs. A regional carrier will shed 400 jobs. About 200 jobs will be cut, at least temporarily, at a company that prepares food for airline flights.
Wage increases remain moderate. A temporary staffing agency in Minnesota reported no changes in wages since Sept. 11.
Overall price increases remain modest, with significant price increases expected in health insurance and decreases noted in natural gas, gasoline and lumber prices. ... November futures prices for natural gas decreased 11 percent from Sept. 10 to Oct. 9, while prices for gasoline in Minnesota dropped 34 percent from Sept. 10 to Oct. 8. Lumber prices declined after Sept. 11.
For all Beige Book reports from 1970-present see the Beige Book Archive.
