Fed's Beige Book Adds Some Color

Every few months, the 12 regional Federal Reserve Banks collect anecdotal observations from their local business and financial contacts to provide some insights into the state of the U.S. economy. The latest “Beige Book” was released today, and it makes for some gloomy reading.

While the country continued to grow in July and early August (the period covered in the latest surveys), the pace of growth slowed considerably, with a few sections of the country either flat-lining or going into reverse.

This is already manifesting in the form of additional permanent layoffs and the end of “hazard pay” for workers. This sentence from the Philadelphia Fed sums things up the best: “Uncertainty is extremely high as contacts await layoffs, evictions, foreclosures, and bankruptcies while the coronavirus persists and the stimulus ends.”

Check out my full analysis here.