Here are the key takeaways from the Fed’s Beige Book:

• Reports from the twelve Federal Reserve Districts suggested continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods.

• Consumer spending appeared to increase on balance despite continued consumer caution that limited nonessential purchases, while activity in the travel and tourism sector picked up relative to seasonal norms.

• Reports on manufacturing activity pointed to further expansion, although the pace of growth eased according to several Districts.

• Home sales slowed further following an initial drop after the expiration of the homebuyer tax credit at the end of June, prompting a slowdown in construction activity as well.

• Demand for commercial real estate remained quite weak but showed signs of stabilization in some areas.

• Reports from financial institutions pointed to generally stable or slightly lower loan demand and noted some modest improvements in credit quality.

• Upward price pressures remained quite limited for most categories of final goods and services, despite higher prices for selected commodities such as grains and some industrial materials. Wage pressures also were limited, although a few Districts noted increased upward pressures in a narrow set of sectors experiencing a mismatch between job requirements and applicant skills.

In sum, slow growth, increased downside risk, low inflation.  Read the full report here.

Cullen Roche

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