Release of Beige Book shows economy moving at measured pace
As the manufacturing industry in the U.S. continues to look for signs of growth, economists and business analysts are waiting with baited breath for the latest round of government-supplied data.
After the release of the Federal Reserve's 'Beige Book' on November 28, those hoping for confirmation that the economy is expanding may find that their expectations have been lowered. According to The Wall Street Journal, the bi-annual report stops short of predicting a gloomy future, but adopts a more measured approach to the concerns of manufacturing companies across the country.
The Beige Book has traditionally been seen as a barometer for industry trends, and while its findings are drawn from a network of business contacts in 12 federal regions, the release of the data is designed to give policy makers in government a feel for the economic health of the U.S. The report is normally produced in October of each year, but was held back due to the presidential election and the predicted arrival of Hurricane Sandy. For some companies, those two events could mirror the projected growth of the economy, which the report believes to be "disappointing."
U.S. manufacturers looking for confirmation that the national output was on the rise could find the report to be a troubling read, with the Fed offering the opinion that factory output was slowing down, or in some cases contracting altogether. Manufacturing has been enjoying a revival in recent months, although the potential fiscal cliff has been stated by economists as the reason why some companies are reluctant to move fully away from the principles of lean enterprise.
Companies looking for crumbs of comfort in the report will note that the Fed refers to the economy moving at a "measured pace." With global markets still apparently in a state of flux and the consumer demand for total quality management in manufacturing highlighted by a number of high-profile problems for overseas competitors, the U.S. economy has shown movement in the last six months.
"It is unclear how much of the weakness is uncertainty and how much is related to slower growth among our trading partners," commented Dana Saporta, an economist at Credit Suisse in New York. "It would almost be good news if the slowdown in the factory sector was all related to the fiscal cliff because activity would come rushing back if Washington can reach a budget deal."