The U.S. central banking system, the Federal Reserve, is a data-heavy organization. Economists at the bank regularly crunch numbers to inform national decisions, such as setting target interest rates. Meanwhile, economists at the Federal Reserve’s district banks — there are 12 across the country — analyze local and regional data to provide research insights on specialized topics, such as economic inequality.

The Federal Reserve’s Beige Book offers a high-level, anecdotal glimpse of current economic sentiment in each of the central bank’s 12 regions. For journalists, it can serve as an extensive tip sheet with insights on local, regional and national story angles.

The Beige Book is valuable for journalists reporting on economic issues, because national and regional economic conditions can change rapidly. The March 2024 edition offers story ideas for reporters covering business as well as those covering elections, education, health care and criminal justice.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

The book is compiled from reports from Federal Reserve district directors and interviews and surveys of business owners, community groups and economists.

The authors of the book refer to individuals surveyed as “contacts,” and they are quoted anonymously. There’s no particular number of contacts needed to produce the Beige Book, but each release is based on insights from hundreds of contacts culled from surveys and wide-ranging conversations among “a diverse set of sources that can provide accurate and objective information about a broad range of economic activities,” according to the book.

Economists and analysts at district banks seek to cultivate contacts who can give a broad economic view — think the head of a trade group who regularly talks with many company owners — along with contacts representing a variety of industries and company sizes.

Research from the Federal Reserve Bank of St. Louis suggests the anecdotes in the Beige Book accurately reflect what’s happening with employment and inflation the U.S. economy. After performing a simple textual analysis of every Beige Book from 2000 to April 2022, those authors find, for example, that mentions of rising prices tend to closely track with official inflation data.

“Of course, the Beige Book — with its emphasis on qualitative and anecdotal information — is written with the belief that those anecdotes provide a deeper understanding of the economy, which simple word counts cannot capture,” write St. Louis Fed senior economist Charles Gascon and research associate Devin Warner in their June 2022 analysis.

The Beige Book published on March 6 includes information gathered during January and February. Across districts, inflation has moderated in recent weeks, but firms overall are increasingly reticent to pass higher transportation and health insurance costs on to customers, “who became increasingly sensitive to price changes.”

In several districts with major metropolitan areas, a spate of commercial real estate loans are coming due this year and over the next few years. Lenders worry mortgage holders, particularly those who borrowed money to buy office buildings, could default because some companies that closed their offices or moved to smaller ones at the start of the COVID-19 pandemic no longer need large downtown offices.

Keep reading for quick summaries and story ideas from the latest Beige Book release.

District 1, Boston

Dry January slump

Contacts from staffing agencies reported fewer sign-on perks for new hires and fewer retention bonuses for existing employees “as well as a trend away from remote work arrangements.” These could indicate that bargaining power is shifting from workers, who have benefitted in recent months from a tight labor market, to employers.

The office lease market is “expected to stay tepid,” and there is “ongoing uncertainty over the fate of office loans maturing in 2024.” In other words, commercial office mortgage lenders with maturing loans will expect to be paid back this year, or have borrowers refinance at higher rates. Are office owners going to meet those obligations, considering the relative dearth of leases?

According to other recent research from the Boston Fed, big banks are expected to feel more pain than small banks from mortgage defaults linked to expiring leases in central business districts.

Story idea: How does “Dry January” affect food and beverage sales in your area? Dry January is an annual public health initiative, started in the United Kingdom, in which people take a monthlong holiday from alcohol. One restaurant industry contact from Massachusetts blamed Dry January and New Year’s resolutions for “an exceptionally weak January.” Later this year, reach out to restaurants and bars to ask how they are gearing up to weather Dry January 2025. Do bars plan to expand their suite of non-alcoholic libations? Are they going to hold more events, like trivia nights or live music, to get customers through their doors?

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

‘Loss prevention measures’

Wages in District 2 grew at a “moderate pace” while statewide minimum wage increases — including a jump from $15 to $16 an hour in New York City, Long Island and Westchester at the start of the year — “caused some business to raise pay more substantially for some employees.”

Meanwhile, input prices — the costs of materials used to make products — also “picked up at a moderate pace.” Specifically, contacts “noted outsized increases in the prices of raw materials such as cocoa, copper, plastic and textiles amid ongoing sharp increases in insurance and freight costs.” This matters because higher input prices often result in higher consumer prices, if a firm thinks moderately higher prices won’t dissuade buyers.

As in District 1 hubs, New York City is facing a spate of office mortgages coming due in 2024, with “financial strain” in the office leasing sector “foreshadowing further increases in defaults in the coming year.” Outside of the city, however, office markets “remained more resilient” due to better balance between supply and demand.

Story idea: Public safety is a concern among business owners and community leaders in District 2, particularly given “a rise in hate crimes and ongoing high rates of retail theft,” which have “reduced the sense of security in public spaces, such as on public transit and in stores.” Some retail owners have tried to deter theft and now face “increased costs due to loss prevention measures.” What specific measures have local business taken? How are chain stores addressing loss prevention differently from mom-and-pop stores? How do longstanding businesses perceive current crime and theft levels compared with higher crime eras during the 1980s and 1990s, particularly in New York City? For example, crime rates for violent crimes, including murder and rape, and other serious crimes, such as grand larceny, are down 72% over the past three decades, according to data from the New York City Police Department. Certain types of violent crime have risen, however. Felony assault, for example, is up 75% compared with 14 years ago in New York City. There is a story to explore about which crimes are being committed at higher rates, when the increase began and how business owners predict crime levels will affect their economic prospects over the months ahead. (Note that police departments occasionally change their definitions of crime categories, which can affect historical comparisons.)

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

Moving out of the moving business

While supply chain issues among contacts “large and small” were “no longer a concern” in District 3, many contacts are still worried about labor shortages, along with “payment problems among low-income households.” Despite supply chain problems being largely abated, one large manufacturer “noted that shipping disruptions in the Red Sea and the Panama Canal would likely add to costs.”

Fully electric vehicles were unpopular in District 3, “selling slowly and piling up on dealer lots,” although “other models were selling well.” New car sales were also lower after seasonal adjustments, with auto buyers generally hampered by high vehicle prices and high interest rates.

Meanwhile, leisure travel was down across the district, “hurt by poor skiing conditions.” Residential real estate inventory remains “extremely low” and existing home sales fell from levels that were also “extremely low.” Construction activity, generally, also slowed.

Story idea: Sometimes downstream effects are as interesting as upstream ones. With high interest rates and high costs, home sales are “weak” in District 3. Those typically affected by weak home sales would include real estate brokers, buyers, sellers and builders. One overlooked group? Movers. One contact that does household moves reported that slow home sales had led to the shuttering of businesses in that industry, with conditions being “the worst they have ever been in my career, which dates back to 1968.” See if a moving company will let you shadow their drivers and operational employees for a day or two — there could be an interesting narrative to tell about the downstream effects of an upstream problem.

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

Trained gig workers

In contrast to other districts, commercial construction firms in District 4 have been “increasing staffing levels to ramp up for new capital projects,” according to contacts in the industry, who report “strong demand for manufacturing space.”

In the restaurant business, some contacts “noted a recent uptick in the cost of chicken, beef and produce.” For now, restaurants seem be absorbing those costs rather than passing them onto guests, according to two contacts.

As in District 3, auto dealers in District 4 have seen sales suffer due to “high interest rates and high vehicle prices,” but one contact said there were more new vehicles available to sell, with new vehicle supply better than it had been in recent months. Some auto dealers were hopeful that spring would bring new customers, but most were not optimistic about improved sales in the coming months.

Story idea: Why are younger workers taking gig jobs, even after completing training for employment in other fields? That’s the situation in District 4, according to one workforce development contact. Check out this recent report, “The Gig Workforce isn’t just Delivering Dinner,” from Cuyahoga Community College and Team NEO, an economic development organization, to understand the types of jobs that make up gig work and the educational investments more likely to lead people into gig work. In Greater Cleveland, for example, about one-in-three gig workers come out of liberal arts and sciences programs while about one in ten come from nursing or business administration programs. The report is also a good place to start building a source list, such as Team NEO CEO Bill Koehler.

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

Election economics

How’s the labor market in District 5? Depends on who you ask. An outdoor goods retailer said they were having a hard time finding workers, but added that’s not abnormal in retail. Meanwhile, one advertising firm “reported a complete [180-degree turn] from last year, and candidates are finding them now and not the other way around.” Finally, an engraver and an aluminum welder reported trouble finding qualified workers. The engraver finally found good help after a lengthy search, “which felt like finding a needle in the haystack.”

Shipping contacts reported more consumer goods coming through ports, and overall demand for water freight “was good this period despite disruptions in the Panama and Suez canals impacting schedules.” Spot rates were up quite a bit — those are one-time shipping rates to move a volume of goods without a longer-term contract — because “carriers were trying to offset higher costs associated with the longer transit times.”

Story idea: One “design firm” — no further details given — expected less demand for the coming year because bigger companies that usually solicit their services “become more conservative with their budgets” during election years “until the election is decided.” There is a potentially interesting explainer-style business-to-business narrative about the decisions big firms make affecting small companies that do contract work for them. Start by looking into the firms that employ large numbers of people — in the Richmond area, this includes CarMax, Altria Group and Dominion Energy. Ask whether they are cutting back on certain services this election year due to uncertainty over who will be president in 2025, along with outcomes of local races. From there, interview principals at smaller companies that could see decreased revenue to find out how they are planning to make it through 2024. If workers who have been laid off due to cutbacks are willing to talk, then so much the better — from a storytelling perspective.

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

Location, location, location

The end of household financial help that began during the pandemic, such as extended child tax and SNAP benefits, “continued to weigh heavily on many households,” with housing costs in particular representing “an acute burden for both consumers and providers of affordable housing.”

Many consumers remain “price conscious,” as they have been in other recent Beige Books, with retailers describing it as “an ongoing normalization of consumer behaviors.” But leisure business has been robust, with cruise lines in South Florida reporting “strong demand,” along with “a solid lineup of events for the second quarter” in New Orleans, such as conferences and festivals.

Story idea: District 6 home sales “in most major markets ended the year well below seasonal norms and remained significantly behind pre-pandemic levels.” Existing homes are hard to come by, particularly those owned by people who had locked in low mortgage rates prior to recent Federal Reserve hikes. This means demand for new homes is high, but home builders “indicated higher lot costs as a significant impediment moving forward.” Are lot prices in your coverage area much higher now than in recent years, even after accounting for regular inflation? Experts at realtor.com can help you gather data to assess the current state and recent history of lot prices.

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

Pandemic business struggles

A cold January hurt consumer sales in District 7, and a more temperate February “was not enough to offset the earlier decline.” Firms in general were willing to invest in their physical assets, “with contacts noting renovations or expansions of existing structures.” Keep in mind that capital expenditures represent a tangible investment in a company’s future and are often a sign that business owners are optimistic about the future.

But high interest rates deterred some firms from outlaying capital expenditures. Inventories were “comfortable” for many retailers, meaning those contacts think they have roughly an appropriate amount of goods to sell to meet demand.

Prices for corn, wheat and soybeans were down, though “the outlook for livestock producers improved.” Dairy farmers benefitted from lower feed prices in recent weeks, but profit margins “remained tight” amid higher labor costs.

Story idea: Organizations that support small business development reported that firms seeking help tended to be established, rather than start-ups. In particular, businesses that were founded during the pandemic “struggled with sustainability.” Take a look at which businesses were founded in your coverage area during the pandemic. Is there something specific about how they serve customers — entirely online, for example — that is making it difficult to adjust to the post-pandemic economy?

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

Pass the buck

Similar to District 3, an auto dealer in District 8 reports having to reset expectations on electric vehicle sales due to a lack of buyer interest. General retailers in downtown Louisville chalk up declining sales to “continued sluggish foot traffic.” Restaurants in St. Louis and Louisville likewise saw sluggish sales, “which they attributed to continued price increases.”

Real estate contacts in Arkansas and Tennessee reported strength in the lower end of the housing market, while the higher end was doing better in Mississippi and southern Indiana. As is the case across the country, businesses that want office leases can get them. Problem is, they don’t seem to want them. “In Louisville, two large tenants announced plans to vacate their downtown offices.”

But on the rosier side of commercial real estate, a contact in Memphis “reported that demand for retail space remains strong.”

Story idea: A contact in the District 8 theater industry “reported increasing costs and difficulty in determining if and how to pass those increases on to patrons.” Consumer prices rise or fall in relation to elasticity of demand, which simply refers to whether consumers still buy something when its price goes up. How do small businesses running on a shoestring — say, a theater — make practical decisions, like whether to eat higher costs or pass them onto consumers? What data do they use to inform price changes? How good is that information? What data do they wish they had but don’t? Or do they use experience and intuition as a proxy for good data?

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

Localizing climate change

Most workers looking for jobs in District 9 were confident they would find one within three months. Recent hires who had weathered a spell of unemployment found jobs primarily in health care, education and manufacturing. Still, food costs during the day are eating into some workers’ budgets, with one worker lamenting that “I wish my $20 [sandwich] lunch went back to [costing] $10. It instead keeps going up.”

Unseasonable warmth hampered winter sports ventures, with ski hills in Montana and Michigan shuttering “due to lack of snow.” There was good underlying demand for winter leisure, though, with hotel bookings “20% higher to start the year,” according to one contact in the upper peninsula of Michigan, who added that “most guests cancel due to lack of snow. We are now showing a 25% decline. This is having a devastating effect on all local businesses.” Still, hope springs eternal for better tourism revenues during the coming season.

Story idea: Per the unseasonable warmth, there is an opportunity for journalists to localize the effects of climate change. While particular weather and climate patterns are often not attributable solely to climate change, overall warming across the planet is. Who are the workers affected by ski hill and other seasonal closures? Are they younger, older, experienced, first-timers, or all of the above? Where else do they turn for seasonal work? Have such closures become more frequent in recent years?

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

Rising household medical debt

The labor market remained tight in District 10, though many firms “also indicated the quality of applicants and recent hires improved recently.” Firms are also focusing on retraining existing workers — likewise, “wage increases were focused primarily on workers who expanded their capabilities, responsibilities and productivity.”

Prices were up “moderately” for goods and services, along with the costs of dining out and hotel rooms. “Amid the rising price sensitivity of consumers, several contacts indicated their emphasis on protecting price margins over coming months.”

There have been “very few property transactions” recently in commercial real estate, which makes it harder to estimate the value of properties that are for sale. Recent appraisals have been met with “skepticism” from buyers “not wanting to be in a position of trying to ‘catch a falling knife’ early in a [commercial real estate] downturn.”

Story idea: Households with low incomes had trouble accessing credit, and they also experienced increasing defaults on credit cards and payday loans. Meanwhile, defaults on medical debt also rose. While medical debt has been covered extensively by national news outlets, reporters covering District 10 regions can localize the issue. Recent consolidation of health systems in Kansas City and St. Louis “could mean bigger medical bills,” according to recent reporting from Spectrum News. Meanwhile, the Federal Reserve’s 2022 report, “Economic Well-Being of U.S. Households,” the most recent available, finds roughly one-third of adults would not be able to pay for a $400 emergency event. What challenges do people face in understanding and using financial assistance programs offered by health systems and clinics?

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

Office leasing twist

Cold winter weather slowed output at oil refineries along the Gulf Coast, in North Dakota and other areas of the Midwest, resulting in “modest upward pressure on fuel prices.” Though oilfield output in District 11 “held steady,” looking ahead “contacts expect U.S. oil production growth to slow notably this year.”

Capacity issues due to drought in the Panama Canal region were “impacting container volumes at Gulf Coast ports.” But drought problems in Texas improved. “Recent rainfall improved pasture conditions, refilled ponds and boosted crop prospects.” Some farmers turned toward cotton and away from grain due to higher prices for the textile crop.

Story idea: As in other districts with major metropolitan hubs, office leasing “remained weak,” with “elevated” vacancies and “widespread” concessions. Also, in bit of a narrative twist, some prospective tenants are assessing the credit of their potential landlords instead of the other way around. Staff at the North Texas Commercial Association of Realtors and The Real Estate Council may be willing to answer questions about how prevalent this practice is, along with other questions on the state of the commercial real estate market in District 11.

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

Double-dip jobs

The local economic boost from Super Bowl LVIII in Las Vegas “exceeded expectations” and was “in line with that of the Formula 1 race held in the city last November.” But leisure and hospitality business abated across most of District 12 “due to expected seasonal fluctuations.”

Contacts in the health and agriculture sectors turned to automation and other “emerging technology solutions” to “boost productivity and improve efficiency.”

Wages were up a bit across District 12, in line with inflation. To retain workers in a tight labor market, “some employers fully absorbed recent increases in health insurance premiums and continued to offer hybrid or fully remote work.”

Story idea: Are people seeking remote work so they can get second jobs? One contact in Nevada reported “that employees preferred remote work because it allowed them to more easily take a second job,” but the report does not indicate the industry those employees work in. The U.S. Bureau of Labor Statistics last updated its state-by-state report on multiple jobholders nearly a decade ago. But experts at the University of California, Berkeley’s Labor Center may be able to provide recent data, insight on whether this is a regional trend and help journalists find employees who work remotely and have second jobs.

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

The post Story ideas from the Federal Reserve’s Beige Book: March 2024 appeared first on The Journalist's Resource.

The U.S. central banking system, the Federal Reserve, is a data-heavy organization. Economists at the bank regularly crunch numbers to inform national decisions, such as setting target interest rates. Meanwhile, economists at the Federal Reserve’s district banks — there are 12 across the country — analyze local and regional data to provide research insights on specialized topics, such as economic inequality.

Eight times yearly, the Federal Reserve’s Beige Book offers a high-level, anecdotal glimpse of current economic sentiment in each of the central bank’s 12 regions. For journalists, it can serve as an extensive tip sheet with insights on local, regional and national story angles. Here, we extend our semi-regular series of Beige Book rundowns with fresh story ideas from the July 12 edition.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

The Beige Book is especially valuable for business journalists, or any journalist assigned to cover business topics, because national and regional economies can change rapidly. The book is compiled from reports from Federal Reserve district directors and interviews and surveys of business owners, community groups and economists.

The book refers to individuals surveyed as “contacts” and they are quoted anonymously. There’s no particular number of contacts needed to produce the Beige Book, but each release is based on insights from hundreds of contacts.

Economists and analysts at district banks seek to cultivate contacts that can give a broad economic view — think the head of a trade group who regularly talks with many business owners — along with other contacts representing a variety of industries and company sizes.

Research from the Federal Reserve Bank of St. Louis suggests the anecdotes in the Beige Book accurately reflect what’s happening with employment and inflation in the U.S. economy.

After performing a simple textual analysis of every Beige Book from January 2000 to April 2022, the authors find, for example, that mentions of rising prices tend to closely track with official inflation data.

“Of course, the Beige Book — with its emphasis on qualitative and anecdotal information — is written with the belief that those anecdotes provide a deeper understanding of the economy, which simple word counts cannot capture,” write St. Louis Fed senior economist Charles Gascon and senior research associate Devin Werner in their June 2022 analysis.

The July 12 release of the Beige Book compiles information gathered in May and June of 2023. Housing demand remained elevated nationally, despite historically high mortgage rates. Labor demand was strong for high-skilled workers as well as in the health care, transportation and hospitality industries.

Inflation has cooled recently, and some businesses were reticent to raise prices as customers slowed their spending. Other firms reported steady consumer demand, allowing them to sustain their profit margins.

Keep reading for quick summaries and story ideas from the latest edition of the Beige Book.

District 1, Boston

Newfound efficiency on Cape Cod

Hotel rooms in Boston were pricey, even considering spring and summer are usually busy — rates were up 12% year-over-year. In Connecticut, tenants at one high-end office building declined to re-sign their leases once they expired, forcing the building into foreclosure.

Single family and condo sales slowed across the district because of a lack of inventory and rising interest rates. Even with “tepid sales,” housing demand is strong relative to the lack of supply, meaning “prices continued to rise, even as the pace of appreciation slowed gradually in recent months.” The state of play in the District 1 residential housing market won’t change until interest rates go down, contacts said.

One semiconductor producer expected a strong 2024, with higher demand coming in part from the spread of consumer products that use artificial intelligence.

Story idea: Some restaurants and hotels on Cape Cod have “achieved efficiencies,” meaning they are meeting demand while getting by with fewer staff after two straight summers of worker shortages. Talk to business owners in the New England leisure industry to find out exactly how they have managed to improve efficiency with fewer workers — and what do workers think? Are they working overtime? Were there technological investments and their work hours reduced? There could be an interesting business enterprise story here.

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

Used cars underwater

The tourism industry in the Adirondack Mountains got an influx of seasonal workers thanks to the lifting of COVID-19-related visa restrictions. Prices for inputs — the components businesses use to make finished goods — remained high due to inflation, though prices receded in some industries. A contact in the construction industry said the prices of doors, windows and other key building materials were improving.

Residential rents in New York City “reached new highs” with upstate New York renters also experiencing an increase in housing costs. Small and midsized banks saw reduced demand for loans of all types.

Story idea: Used car values that spiked during the pandemic have come back to earth in District 2, with used car sales “subdued.” The loan-to-value ratio on some outstanding used car loans reached 120%, according to contacts, meaning the value of the loan is greater than the resale value of the car. A high loan-to-value ratio can be a precursor to delinquency. Talk with auto financers and loan holders and see if there is a story to be told about underwater loans in the used car financing market.    

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

211 specialist solutions

Few firms across District 3 carried out widespread layoffs, but some firms across industries did conduct targeted layoffs, were more selective in their hiring and reduced employee hours. Still, there were labor shortages in certain industries and jobs, such as housekeeping staff and cooks. Consumers overall were “more careful in their spending.”

Banks in the district saw a hike in mortgage origination, though home equity loans plateaued. Businesses faced tighter credit in the wake of bank failures during the spring and contacts “described an environment of elevated caution in which most banks want to extend credit only to customers with whom they already have a relationship.”

Story idea: In New Jersey and Pennsylvania, calls increased to 211, a phone number for finding government and nonprofit assistance with housing costs, utility bills and other resources. Nearly 95% of people in the U.S. have access to 211 across every state and Puerto Rico. Spend a day with specialists who field 211 calls for a solutions-based journalism story. Why do 211 specialists do this work? What are their personal stories? How does the process of connecting people in need with available resources play out? What do these specialists need to do their jobs better? The United Way operates 211 in New Jersey and Pennsylvania.

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

Food pantries in crisis

Business owners in District 4 were cautiously optimistic about their prospects over the rest of the year and many saw less of a chance than in the first half of the year that the U.S. would fall into a recession.

Consumer spending overall was strong, though one “large general merchandiser” said the reduction of pandemic-related Supplemental Nutrition Assistance Program benefits was constraining household budgets. Some firms paused expansion projects, except those subsidized with government funds, according to one banker.

Story idea: Since March, the number of families needing help with food increased 35%, according to contacts at District 4 community organizations. One contact at a food pantry said, “‘people are experiencing food insecurity more now than I have seen in my seven years with the organization.’” Are local government officials aware of this increase? If so, what are they doing to help constituents get enough food on their tables?

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

Toothaches in dental care

Worker availability varied across District 5. One software company had an easier time hiring IT workers, but a tour bus company couldn’t find enough drivers and mechanics. Some businesses increased prices because of the rising cost of capital, driven by recent Federal Reserve interest rate hikes, while other firms said they could not pass along the full costs of capital to consumers, lowering their profit margins.

In residential real estate, some buyers were faced with bank appraisals not meeting the sales price, meaning they had to renegotiate with the sellers to a lower price, pay the difference in cash, or walk away from the purchase.

Story idea: A line from the District 5 report stands out: “A dental laboratory reported not meeting their numbers for the past six months due to a significant slowdown in the dental market.” Are District 5 residents seeking less dental care for some reason? Are they foregoing more expensive treatments, such as bridges and dentures, which labs usually fulfill? See what your dentist has to say and if they can put you in touch with others in the dental care field to find out what’s going on.

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

A glut of cheese

A downturn in domestic tourism was offset by business and international travel to District 6. Beach resorts dealt with falling occupancy while “those hoteliers reported some diminished pricing power,” meaning they had less ability to set room rates at higher levels while maintaining demand.

Rail freighters saw “significant” declines in year-over-year volumes while shipping ports likewise reported slowdowns in container traffic, “owing to inventory destocking by retailers and weaker global demand.”

The citrus market had low crop yields and weak profits, but cattle farms saw strong sales “as demand for beef remained high amid low supply.”

Story idea: Demand for milk fell due to “oversupplies of cheese.” What happened to make cheese producers supply too much cheese? This could be an interesting case study and explainer on how business inventories work — firms have imperfect information to predict their economic futures. Sometimes they stock up, anticipating higher demand, but that demand does not materialize. These decisions often have consequences that spill over and affect other firms, such as milk producers in this case.

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

Community development capital crunch

Amusement parks and tourist attractions saw an uptick in activity, with contacts in those industries reporting consumers in general unlikely to give up their leisure plans, instead cutting back elsewhere in their nonessential spending, if needed.

Some retail contacts reported having a bit too much product in stock, particularly those selling apparel, beauty items, and sports and outdoor goods. In residential real estate, cash deals were increasingly common as high interest rates reduced the number of buyers, one contact in Iowa said. Drought put farm crops behind schedule, especially corn, but it was “too soon to panic,” according to one agricultural contact.

Story idea: Here is a story on how the high cost of borrowing money is keeping neighborhoods from flourishing: Community Development Finance Institutions in District 7 report having trouble providing affordable loans to low- and moderate-income small businesses and homebuyers. CDFIs are usually banks or credit unions that focus on providing capital to low-income communities. Reach out to CDFI officers to find out what’s happening on the ground and whether they can put you in touch with clients to interview.

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

Bicycle boom in Little Rock

Across industries, labor costs were up and certain businesses that work on tight margins, such as supermarkets, couldn’t fully pass those costs onto customers. One grocery store contact “reported that they would pass about 25%-33% of higher costs to consumers.”

In Arkansas, one retailer reaped smaller profit margins as consumers focused on essential groceries rather than merchandise with higher margins. Also in Arkansas, a boat seller saw higher demand for low- and high-end boats while “sales for middle-market boats” had “collapsed.” In Memphis, “a major [electronic vehicle] manufacturing project” has meant more business for real estate and construction firms in the area.

Story idea: Has your news outlet covered the bicycle boom happening in Little Rock, Arkansas? “The Little Rock bicycling industry has seen significant growth in recent quarters, generating more than $150 million in total economic impact from jobs to tourism to taxes.” Interview local bike shop owners and see if their sales mirror overall growth. Why are people in the region taking up bicycling? Are recent infrastructure improvements part of the reason for this boom? Is there more growth in road biking than mountain biking? Is this industry also attracting dollars from outside the region?

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

New kind of company town

While some firms have handed down layoffs in Minneapolis, most workers who lose their jobs “‘are doing OK finding new jobs on their own,’” said one contact in workforce development. Some professionals in the area were thinking of moving out of state for a time to take advantage of remote work policies.

Vacancy rates in downtown Minneapolis remained high. Two office towers there recently sold “at steep discounts.” Heavy equipment sales were down in District 9, with “more customers choosing to repair rather than replace equipment due to higher financing costs.”

Story idea: Here is something you don’t hear every day: “A restaurant in central Minnesota reported that it bought an apartment building to provide workers with nearby housing.” Whether this is a trend or one-off project, the details could be fascinating — it’s reminiscent of the company towns built during the Industrial Revolution. Unfortunately, “central Minnesota” is a large area, so it would take some digging through property records to find the restaurant. Analysts working at District 9 might be willing to provide more geographic precision.

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

Small business credit woes

Firms in District 10 are generally not expecting to lay off workers, but some are reducing or pausing hiring. Manufacturers in particular slowed their production, with some expecting business conditions to “soften in the coming months, noting continued weakening in order back logs and a further deterioration in demand.”

Drought reduced grass and feed available for cattle producers, while 15% of corn and soybean acres and 30% of winter wheat acres “were in poor or very poor condition” across District 10. The energy sector saw a large decline in the number of active rigs, “as weak oil and gas prices continued to squeeze profitability.”

Story idea: Several small business contacts reported having missed credit card payments or paying only the minimum due, “which has negatively impacted their credit reports.” Some have even turned to online lenders and other non-traditional financial institutions that usually offer loans with less-than-favorable interest rates. Find out whether this trend holds true for local businesses in your coverage area — and whether it portends coming small business closures.

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

More than meets the eye

There was steady hiring in the service sector, but job growth “slowed to a crawl” in manufacturing. Bankers are “pessimistic,” with an eye toward business activity declining during the rest of the year and “an increase in nonperforming loans,” where borrowers miss payments for several consecutive months.

A survey the Federal Reserve Bank of Dallas conducted in June of more than 350 business executives found 44% were understaffed and wanting to hire, while 12% were understaffed but not expecting to hire. Retail sales were down for clothing stores and stores that sell food and beverages, while sales were up at pharmacies, building material retailers and garden supply stores.

Story idea: Houses are being built on time, by and large, but some sites are being slowed by a shortage of transformers. These are devices that may be used, for example, to convert power from a large generator into power that can be used for handheld tools. Here is a chance to localize an international story. Transformers are made using copper wire, and there is a global copper shortage expected to last for the rest of the decade.

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

A clogged arts pipeline?

While tourism kept retail sales strong in Utah and Hawaii, in other parts of District 12 consumers increasingly turned to low-cost goods as state-level fiscal stimulus measures ended. Leasing for office space in downtown districts was hurt by slow sales at physical retail locations as well as “safety concerns,” according to one contact in Northern California.

“Expanded ocean freight capacity” meant more exports from District 12 to overseas buyers, “but lingering backlogs, the war in Ukraine, and a strong dollar limited access to some international markets.” In one example of the push and pull of forces inside and outside of markets, agriculture production got more costly because of higher labor and insurance costs, but more rain than usual “somewhat offset irrigation costs.”

Story idea: Striking TV and movie workers attract national headlines, but art institutions face “significant headwinds due to smaller audiences and declining donations.” The economy has been surprisingly resilient during this high inflationary period, meaning there should still be art patrons. Could a lack of arts education in schools be behind shrinking audiences for the arts? Many people learn about the arts in their elementary, secondary and high school curricula. The California Arts Education Data Project, part of a nonprofit that advocates for more arts education in the state, has information and analysis to get you started on this story. There is also academic research on the topic — for example, nationally, public charter high schools are least likely to offer arts education courses, finds a 2020 paper published in the Arts Education Policy Review.

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

The post Story ideas from the Federal Reserve’s Beige Book: July 2023 appeared first on The Journalist's Resource.

From a worker shortage delaying delivery of federal food benefits in New York to an impending cut in cotton production in Texas to rural transportation challenges in the Southeast keeping some people from looking for jobs, the final Federal Reserve Beige Book of 2022 is a trove of story ideas for journalists across beats.

Economists at the Federal Reserve’s district banks — there are 12 across the country — regularly analyze local and regional data to provide research insights on specialized topics, such as economic inequality. The central bank also coalesces those insights in the Beige Book, a high-level, anecdotal glimpse of economic sentiment in each district.

This is the fourth in our occasional series revealing story nuggets within the Beige Book, which comes out eight times yearly. The final Beige Book of 2022 was published on Nov. 30. The Journalist’s Resource previously explored the September 2021, March 2022 and July 2022 editions.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

The Beige Book is especially valuable for journalists covering business topics, as national and regional economies adjust to high inflation amid the winter holiday spending season, and the ongoing risk that the U.S. could fall into a recession. The Beige Book is compiled from reports from Federal Reserve district directors along with interviews and surveys of business owners, community groups and economists.

Individuals surveyed are referred to as “contacts,” and are quoted anonymously. There is no particular number of contacts needed to produce a Beige Book, but each release is based on insights from hundreds of contacts culled from those surveys and wide-ranging conversations.

Research from the Federal Reserve Bank of St. Louis suggests the anecdotes in the Beige Book accurately reflect what’s happening with employment and inflation in the U.S. economy.

After performing a simple textual analysis of every Beige Book from January 2000 to April 2022, the authors find, for example, that mentions of rising prices tend to closely track with official inflation data.

“Of course, the Beige Book — with its emphasis on qualitative and anecdotal information — is written with the belief that those anecdotes provide a deeper understanding of the economy, which simple word counts cannot capture,” write St. Louis Fed senior economist Charles Gascon and senior research associate Devin Werner in their June 2022 analysis.

According to the Nov. 30 release, high mortgage rates spurred by months of Federal Reserve rate hikes cooled the housing market nationally, with home sales falling “steeply” in some parts of the country. Despite inflation rates touching levels last seen in the 1980s, demand for restaurants and luxury hospitality services was strong.

Firms had a slightly easier time hiring, and there were notable layoffs in tech, finance and real estate, but overall “some contacts expressed a reluctance to shed workers in light of hiring difficulties, even though their labor needs were diminishing.” Still, hundreds of thousands of jobs are being added to the economy each month, the unemployment rate is low — 3.7% in November — and Federal Reserve leaders have publicly stated rate hikes are almost certain to continue over the coming months.

Federal Reserve Chair Jerome Powell, in discussing future rate increases during a speech Nov. 30 at the Brookings Institution, said it is “likely that restoring price stability will require holding policy at a restrictive level for some time. History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”

The latest edition of the Beige Book compiles information gathered through Nov. 23. Keep reading for quick summaries and story ideas for each district.

District 1, Boston

Fresh profit hit for restaurants

Semiconductor manufacturers in District 1 experienced varied economic realities, “as one contact in that field said that demand was incredibly strong while another perceived that the industry had entered a recession.” Entry-level workers at convention centers were highly sought after, as were nurses due to the ongoing flu season.

Recession fears and higher mortgage rates meant single family home sales slowed across the district, while there was “a substantial deceleration for condos.” Going out to eat got more expensive as menu prices kept pace with inflation, increasing 8% from last year but holding steady since the third quarter of 2022 “as contacts noted food prices levelled off after an earlier period of steep increases.”

Story idea: With restaurants facing “a fresh hit to profits from increases in credit card fees,” which were announced earlier in the year, how have local businesses in your coverage area responded? Have they passed those costs onto consumers or are they choosing to absorb the higher fees to avoid reduced sales? Have different types of restaurants — for example, casual versus high-end — responded differently?

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

Discontented retail winter

The hospitality sector in New York City had a strong October and early November, “reflecting leisure visitors extending weekends with remote work and a gradual rebound in business travelers.” Visits from international tourists and business travelers increased there, “though the strong dollar has reportedly reduced spending per visitor.”

Expensive real estate sales were particularly slow in the city and surrounding area, but, on the whole, prices there have not significantly fallen in response to higher mortgage rates. Many store owners “reported that business has edged down and expressed widespread pessimism about the upcoming holiday season.”

Homelessness is up across District 2, as eviction moratoria enacted during the pandemic lapsed. Food insecurity was a problem, with some households “forgoing healthier and more expensive food items to buy less costly bulk items, and the use of food pantries continues to increase.”

Story idea: Applications rose for the Supplemental Nutrition Assistance Program — SNAP — the federal program that helps eligible households with their food budgets, “but staff shortages have impeded processing of these applications.” There are a lot of story ideas to unpack. How are worker shortages, which have plagued employers of all stripes this past year, trickling down to delay delivery of services vital for District 2 families with lower incomes?

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

Calls for rental help

Over the coming year, District 3 businesses surveyed across industries expect to raise compensation by 5.1% per employee, down from an expected 5.8% during third quarter surveys, with firms making “preparations for a potential recession” but “hesitant to lay off employees, given recent hiring difficulties.”

Residential real estate sales “fell steeply in most markets,” with industry contacts blaming “high prices combined with rising interest rates” for “reduced housing affordability” and for driving “potential buyers from the market.”

Things were a bit less bleak in commercial real estate, with contacts relaying “steady construction activity” despite a “slight decline in leasing activity,” though they were unsure what demand for office space will look like over the coming year.

Story idea: Use data on types of calls to 211 — a number anyone can call to connect with community services across the country — to understand pressing needs of individuals in your coverage area. If you track this data over time, you can identify trends in calls related to particular needs, which can spur ideas for investigations or bolster existing investigations. In District 3, these calls were mostly about getting help for housing issues, according to the Beige Book. Of the 31% of calls related to housing assistance, 42% were about getting help paying rent, “as landlords continued raising rents.”

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

Shrinking housing supply

There are still more workers than positions in District 4, making for a tight labor market, but the balance is beginning to level out. The proportion of contacts at firms across industries that reported raising worker pay over the past two months dropped below 50% for the first time since early 2021.

As in District 2, some District 4 retailers are unsure whether holiday sales will make up for retail sale declines over recent weeks, though an extended recent period of warm weather was a boon for firms in the restaurant and tourist industries. High interest rates and high prices hurt auto sales.

Story idea: This story has been covered before, but it is almost always worth re-exploring: Housing crunches hit households with lower incomes first, and often hardest. And here is a potential new angle: Nonprofit housing developers reported the supply of lower-income housing will shrink due to higher overall materials and labor costs. A construction contact in Ohio relayed that there will be fewer housing units built over the coming months, not just because of higher costs, but because of “unpredictability of costs.”

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

Office space incentives

Freight volume in and out of District 5 ports was down overall. While import volumes increased a bit, “loaded exports continued trending down” while the “volume of empty containers leaving the ports was robust.” Among the most imported items: furniture, sporting goods and heavy equipment.

Home prices across the district plateaued, with sellers “offering more concessions, such as temporary rate buydowns or paying closing costs, to complete sales.” High construction costs and recession fears made builders reluctant to snatch up new lots.

Business and leisure travel was steady during the fall months, though a winter resort in West Virginia “was concerned that labor shortages would limit their ability to provide the full range of services for this holiday travel season.”

Story idea: During the first two years of the pandemic, work-from-home exploded for employees with jobs amenable to remote work. Over recent weeks in District 5, there was strong demand for high-end offices, “especially in suburban markets, as companies were paying to upgrade to nicer workplaces in order to persuade employees to return back to the office.” What specific office incentives are employers offering? Fancy coffee machines? Decorative water features? On-site childcare? Are these incentives enough to convince District 5 remote workers to take up their commutes again?

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

Rural labor woes

Economic growth was “tepid” in District 6 from October through mid-November, with households earning low-to-moderate incomes seeing “declines in financial well-being as the rising cost of living strained household budgets.” Cost inflation in groceries, fuel and rents “strained household budgets, resulting in increasing demand for food pantries and rental assistance programs.” Cash buyers squeezed low-to-moderate income households out of home buying markets.

Hurricane Ian made landfall in late September and caused tens of billions of dollars of damage in Florida, “with agriculture and tourism being the sectors most impacted.”

Firms across industries found it “nearly impossible” to hire qualified candidates, so they invested more heavily in training, with the “most acute” labor shortages happening in construction, childcare, education and healthcare.

Story idea: Declining labor force participation is a decades-long national story with many narrative threads, including that people are, in general, living longer now than in years past and spending more years in retirement. Other reasons for the labor shortage vary by region: In District 6, one labor shortage angle worth exploring is the lack of affordable childcare and public transportation, “particularly in rural areas.” These problems have “worsened since the pandemic” and are preventing people from job seeking.

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

‘Tough choices’ for nonprofits

Homebuyers were caught off guard by rising mortgage rates — they were, in fact, “shocked” by rising rates, according to a residential real estate contact. Accordingly, home values fell a bit, as did mortgage lending volumes, meaning fewer people were in a position to ask a bank for a home loan. Rents, meanwhile, “were up again.”

There were some pockets of drought, but some farmers did well, with corn and soybean production “close to records set in 2021.” The problem remains in moving crops to where they are needed, as barges are “constrained due to low water levels on the Mississippi, pushing up shipping costs, limiting exports, and reducing the availability of chemicals and fertilizers.”

Story idea: Across the U.S., local community services often come from nonprofit groups that work to help people with food and housing. While there has been extensive coverage of how rising prices are hurting the budgets of individual families, there is less coverage of those nonprofits, which also often operate on a shoestring. Inflation is both “straining budgets” of nonprofits in District 7, as well as driving people to seek their services more, and “nonprofit leaders were making tough choices on which services to provide and which to cut.” Here is an opportunity for a story or series on how and why those tough choices are made.

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

Rural hospitals turn to urban investment

Restaurants in Little Rock, Arkansas, rejoiced with 50% more customers than this time last year and “they are optimistic about the end of 2022 and the beginning of 2023.” Hospitality firms in St. Louis were also busier over the past month compared with other recent months, but they were “uncertain” about the economic outlook moving forward.

Also in Little Rock, over the past quarter people were using their credit and debit cards less at major retailers that offer groceries in favor of using SNAP benefits via electronic benefits transfer card payments. Coal production decreased in District 8 in October, but is up 5.4% compared with the same time last year.

Story idea: In Mississippi, rural health care providers “have continued to shrink and rely on investment from medical institutions in urban areas.” There is a story or series to be done here about what it means for rural hospitals to rely on funding from larger health systems in cities, including whether the health services being funded by urban hospitals meet the needs of rural patients.

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

Tribal casinos need blackjack dealers

Entry-level, seasonal shelf-stocking jobs peaked at $25 an hour in some cases, with a contact at a staffing firm referring to such pay rates as “craziness.” While many business contacts across industries reported “they were increasing wages and salaries for most job categories, and increases were larger than in the past,” Native American-owned businesses “reported disproportionately acute challenges with labor availability and input costs.”

Residential real estate sales have ticked sharply down across District 9, particularly in Minnesota, where sales volumes fell 31% compared with last year. While agriculture income was up from July to September over the previous year, cattle ranchers in Montana have reduced their herds because of “high feed costs and lack of available hay in the drought-stricken state,” while “reportedly reducing their planned capital expenditures for 2023.”

Story idea: Casinos are critical economic engines for Native American tribes, but some in District 9 are having trouble hiring and retaining workers: “A tribal leader shared that despite offering wages above $30 an hour, casinos were having difficulties attracting blackjack dealers and were paying for the few inexperienced applicants to take classes.” How is this labor crunch affecting tribal casino revenues as well as overall reservation budgets, and what are tribes doing to manage?

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

Community financing time bomb?

In perhaps a promising sign for the nation’s inflation future, many manufacturing contacts expect prices of the materials they use to continue to rise over the next half year, but “a larger number of manufacturing businesses expected price pressures to ease somewhat over the medium-term.” Housing rental costs “remained a significant source of inflationary pressure for households” in District 10.

Consistent with other districts, demand fell for lower-end consumer goods and common services, such as haircuts, while “high-end entertainment venues and travel resorts reported ongoing strength.” As drought parches the Midwest, hay production has suffered and livestock producers expect to face higher feed costs.

Story idea: Just as some home buyers nationwide are turning to riskier mortgage products, like adjustable-rate mortgages, so, too, are some businesses in District 10. Contacts at community development financial institutions — which, among other things, lend to entrepreneurs in economically distressed areas — report more business owners using “non-traditional financing methods such as unsecured lines of credit and online finance firms that require higher interest rates, shorter terms, and more onerous repayment terms.” Depending on how widespread the trend is, these alternative types of credit could be a ticking time bomb for District 10 businesses. Search for community development financial institutions in your area to begin building a contact list.

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

Cotton slump ahead

In yet more signs of these tight labor market times, there are “numerous reports” from District 11 firms facing hiring challenges, with one manufacturer of fabricated metals going so far as to say that “the firm was operating by prayer these days.” Among the industries facing short labor supply: healthcare, commercial trucking, auto repair, restaurants and oil extraction. But tech firms in District 11 laid off workers, and some mortgage bankers had frozen hiring.

During the first year or so of the pandemic there was a housing boom in Austin, Texas, with huge asking (and selling) prices, historically speaking. Things have changed. Austin is now the “roughest market” in District 11 with sellers having to offer incentives and cut asking prices in order to close. Overall, residential real estate contacts in District 11 expect a “further erosion in sales and home starts in the near term.”

Story idea: Agriculture reporters, keep a close eye on the “unprecedented volatility” in cotton markets. Cotton prices right now are quite a bit lower than grain prices, according to District 11 agriculture contacts, which “may prompt a significant drop in cotton acreage next year.” A good portion of the nation’s cotton production happens in District 11 — how are growers preparing for a slack 2023?

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

‘A sharp drop in donations’

Some people looking to buy homes in southern California have decided to rent instead, while in northern California a residential real estate contact “reported a change in scope for some single-family construction projects, now built to rent rather than to sell.”

Getting high-tech electrical components to equipment manufacturers has been a challenge because of “pandemic containment measures in Asia,” with supply chain bottlenecks also affecting agricultural producers.

Also on the agriculture front, there is good international and U.S. demand for dairy products and nuts, but the strong dollar overseas is dampening overall international demand for agricultural products produced in the U.S. A lack of rain across California hurt the summer tomato crop, “and is threatening expectations for various winter crops, especially leafy greens.”

Story idea: Here is another opportunity for a systems story exploring the critical roles nonprofit organizations play at the local level — and why they are on the frontlines of economic downturns. Across District 12, nonprofits that provide services related to behavioral health, substance use and housing have noticed “a sharp drop in donations from both individuals and corporations in recent weeks,” with some community service providers having to shutter because they could not meet their operational costs and staffing needs.

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

The post Story ideas from the Federal Reserve’s Beige Book: Final edition of 2022 appeared first on The Journalist's Resource.

From vacant lab space in Boston to inexperienced oil rig workers in Dallas to utility bill hikes in Atlanta, the July 2022 edition of the Federal Reserve’s Beige Book is a trove of story ideas for journalists across beats and coverage areas.

Economists at the Federal Reserve’s district banks — there are 12 across the country — regularly analyze local and regional data to provide research insights on specialized topics, such as economic inequality. The central bank also coalesces those insights in the Beige Book, a high-level, anecdotal glimpse of economic sentiment in each district.

This is the third in our occasional series revealing story nuggets within the Beige Book, which comes out eight times yearly. We previously explored the March 2022 and September 2021 editions.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

The Beige Book is especially valuable for any journalist covering business topics, as national and regional economies continue to adjust amid high fuel prices and inflation and as COVID-19 continues to infect tens of thousands of people in the U.S. The Beige Book is compiled from reports from Federal Reserve district directors along with interviews and surveys of business owners, community groups and economists.

Individuals surveyed are referred to as “contacts,” and are quoted anonymously. There is no particular number of contacts needed to produce a Beige Book, but each release is based on insights from hundreds of contacts culled from those surveys and wide-ranging conversations.

Economists and analysts at district banks seek to cultivate contacts that can give a broad economic view — think the head of a trade group who regularly talks with many company owners — along with other contacts representing a variety of industries and company sizes.

Recent research from the Federal Reserve Bank of St. Louis suggests the anecdotes in the Beige Book accurately reflect what’s happening with employment and inflation in the U.S. economy.

After performing a simple textual analysis of every Beige Book from January 2000 to April 2022, the authors find, for example, that mentions of rising prices tend to closely track with official inflation data.

“Of course, the Beige Book — with its emphasis on qualitative and anecdotal information — is written with the belief that those anecdotes provide a deeper understanding of the economy, which simple word counts cannot capture,” write St. Louis Fed senior economist Charles Gascon and research associate Devin Werner in their June 2022 analysis.

According to the July 13 release, consumer spending fell across much of the country as personal income increasingly went toward higher food and gas costs. Wages have also risen for some, with one-third of districts indicating that “employers were considering or had given employees bonuses” to help workers deal with higher everyday prices. Several contacts were worried about cooling consumer demand in the months ahead. Still, in sectors like travel and hospitality, “firms were successful in passing through sizable price increases to customers with little to no pushback.”

The latest edition of the Beige Book compiles information gathered from late May through July 13. Keep reading for quick summaries of the July 13 Beige Book release, along with story ideas for each district.

District 1, Boston

Lab space lull

While employment levels held steady during the reporting period, wage increases paced higher than usual. So did prices, with some firms across a variety of sectors putting forward “large or very large price increases” and others “planning to impose new mark-ups soon.”

To wit: year-over-year, frozen fish prices were up 30%. Hotel room rates in Boston were up 87% from February to May 2022, much higher than usual seasonal changes in hotel rates. Cruise ship passenger volume remained below half of what it was in 2019, but June 2022 airline passenger traffic achieved 90% of June 2019 levels.

Many contacts were worried about high inflation, along with “its implications for consumer demand and for their own profit margins.”

Story idea: With world-class universities and more than 1,700 biotech companies in greater Boston, life sciences are a major employer and economic hub for the region. But some investors, facing high inflation and high interest rates, “are looking to put their money elsewhere — perhaps in investments with steadier, more guaranteed returns,” WBUR’s Yasmin Amir reported in May. This is playing out in the commercial real estate market for life sciences, with July Beige Book contacts relaying “concerns about tenants’ creditworthiness and a looming glut of space.”

Will Boston-area labs face the same fate as the American mall, huge structures left vacant or repurposed? Reach out to owners of vacant real estate dedicated to the life sciences to find out whether they are sticking with the industry or ready to jump ship. Trade groups such as the Massachusetts chapter of NAIOP, formerly known as the National Association for Industrial and Office Parks, and the Greater Boston Real Estate Board, have staff familiar with the regional commercial real estate landscape. Ask them for help finding sources who rent space to life sciences firms. Also check out our coverage of academic research on abandoned, or “zombie” properties.

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

Negotiating higher salaries

New and used auto sales were slow in upstate New York, “largely reflecting the ongoing lack of inventory, as well as affordability issues.” Other retailers, meanwhile, reported flat or weaker sales. But overall, consumer confidence in the state has rebounded since the start of the pandemic and is “fairly high by historical standards.”

Outside of New York City, leisure and hospitality firms “noted a pause in growth.” But in the city, “tourism has continued to flourish” with one expert noting “both business travel and international visitors have picked up to a surprising degree in recent weeks,” in part due to loosening inbound travel restrictions. Hotel rates have, in turn, risen to over $300 per night on average, higher than before the pandemic.

The housing market weakened for sellers but remained favorable for landlords. In upstate New York, real estate contacts “characterize the market as strong,” but less robust than in the recent past. For example, “bidding wars still occur but with fewer bidders competing and some sellers have lowered their asking prices.” Residential rents, meanwhile, have risen upstate. In New York City, rents reached all-time highs in the second quarter of 2022 with “vacancy rates at a 20-year low.”

No specific anecdotes were reported for areas outside the New York metropolitan region and upstate.

Story idea: Workers in the second district continue to benefit from labor shortages, with especially strong hiring demand in technology and health care. Hiring was also strong in trade, information, transportation, and professional and business services. Call centers are also bringing on new workers, according to one contact. An employment agency relayed that “more employees are using counteroffers to raise their salaries in their current jobs.”

For many workers, particularly those in non-unionized industries, it may be a new experience to be in a position to negotiate higher salaries. How are they doing it? Social media is one way to find employees who have made successful counteroffers to their bosses.

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

Home equity slump

Since April, about 60% of contacts from firms outside manufacturing have encountered increasing wage and benefit costs per employee. For the first time since early 2021, restaurants and retailers other than auto dealers faced falling sales, with contacts seeing “either less customer traffic or smaller purchases per visit, if not both.”

Meanwhile, about 60% of manufacturers are looking ahead to higher materials prices over the rest of the year, down from an all-time high of 80% in January. Overall manufacturing activity declined as “shipments and new orders fell significantly, with new orders turning negative.”

Story idea: Bank lending other than credit cards “grew moderately” at “a similar pace as seen during the same period in 2019.” But the shape of lending in the third district is now more uneven. Home mortgages and commercial and industrial lending “grew at a moderate to strong pace” but growth has been “virtually eliminated” in the commercial real estate and home equity sectors, due to rising interest rates and uncertainty about the economy in the near future.

Some borrowers use home equity to maintain their homes, including for major expenses — like a new roof or kitchen remodel — that can substantially increase a home’s value. Is housing stock quality poised to suffer because high interest rates are making it unpalatable for homeowners to draw on their home equity? Lenders, like the Philadelphia Federal Credit Union, and trade groups, like the Building Industry Association of Philadelphia, may be good places to turn to get a lay of the home equity landscape in the third district.

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

Lieu of wages

Most firms contended with higher production costs, excluding labor costs. Oil and electricity price hikes “have pushed up prices for an array of inputs such as drywall, lubricants and asphalt.” Most firms in the fourth district “raised prices as they attempted to keep up with rising costs.” Bucking the trend in at least one sector, “some manufacturers passed through lower steel costs to customers.”

As in the second district, home sales in the fourth district have taken a knock recently, with one real estate agent noting sustained high demand at the same time that high interest rates have “priced some buyers out of the market, which reduced the number of competing offers on listings.” Rising interest rates are also expected to continue to weaken demand in nonresidential construction and real estate, according to contacts.

While demand for freight “weakened” due to declining imports in part stemming from COVID-19 lockdowns in China, there were slightly more freight drivers available even as “overall, the supply of drivers remained tight.” Here’s our coverage of research on the truck driver shortage and the trucking industry workforce.

Story idea: The percentage of employers that raised wages has fallen from 70% at the end of 2021 to about 50% now. What incentives are employers in your coverage area offering in lieu of higher wages? One manufacturer, citing employee concerns about food and fuel costs, reported “she was considering offering them memberships to warehouse clubs to help reduce these expenses.” Staff at one bank are pushing for remote work, with the contact there also relaying that “the firm was considering providing transit benefits.”

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

Upcoming grain demand

Employers were increasingly able to match job vacancies with appropriately skilled candidates, with firms by and large still offering higher wages to attract and retain employees. Jobs were especially flush in leisure and hospitality, “where firms reported an increase in tourism and conference activity.”

Trucking demand “remained strong,” but surcharges due to high fuel prices ate up most savings from falling short-term shipping rates. As in District 4, many trucking firms “indicated that drivers have become more available and turnover has decreased due to increased wages and benefits and a return of independent owner-operator drivers to freight lines.” Some trucking firms are having trouble “obtaining parts to service their existing fleet.”

Leisure and business travel “remained strong” with hotel occupancy and daily room prices ticking up over the last few weeks. Airports also saw an uptick in passengers “but there remained issues with flight cancellations due to lack of flight crews.”

Story idea: Ukraine and Russia have reached reach an agreement to allow Ukraine, the world’s fourth-largest grain exporter, to start moving shipments through the Black Sea. Still, the months-long blockade of grain is one way District 4 has felt the ripple effects from the war in Ukraine. Though grain and feed exports fell during the current reporting period, “ports expect volumes to increase this summer due to the decreased supply to other countries from Eastern Europe.” Are exporters and agricultural producers prepared to meet higher export demand?

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

Utility bill hikes

Reflecting high fuel prices in the U.S. and swaths of Europe in the process of cutting oil and gas imports from Russia, refineries in District 6 were “at historically high production levels.” Natural gas production was also elevated. Exports of natural gas in particular “soared amid increasing global demand.” Financing for renewable energy also “remained robust, particularly in solar and offshore wind, as well as recently announced carbon capture facilities in the district.”

Several contacts working in commercial real estate were worried about declining values, in addition to noting more buyers “seeking concessions, shrinking pools of buyers, and declining prices in some property sectors.”

Orange production in Florida beat recent forecasts, but “was still well below last season’s production.” Farmers yielded higher prices for “cattle corn, cotton, eggs, milk soybeans, rice and broilers,” year over year. Cattle prices didn’t budge.

Story idea: Some utilities are “at high risk of interrupted service due to heightened demand and insufficient generation capacity.” In the middle of a heat wave, and in addition to potential service disruptions, consumers may ultimately pay the price, with utilities facing “higher fuel and power costs which are expected to eventually result in higher utility bills for customers.” This could be an appropriate time for a story featuring customers sounding off about paying more for lower-quality energy service — and exploring whether the current energy system in the district is sustainable. 

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

Back to school

Customers in District 7 were generally willing to accept higher prices from consumer-facing businesses, but some contacts “said they were only able to pass on some of their higher costs,” driven in part by “higher costs for labor, energy, and shipping.” Shoppers with lower incomes “were trading down and buying more in-store brands, while higher income shoppers were buying more goods in bulk.”

Residential rents rose “modestly,” in contrast to other districts that include large cities. Similar to other districts, rising mortgage rates reduced the number of offers for home sellers, but home prices still increased a bit.

Farm income is expected to be “solid” for “most producers” for the rest of the year. Still, for some agricultural producers, intense rains “diluted fertilizer and created ponds in fields, hurting potential yields; in other areas there were concerns about dryness and heat.” Egg production and prices settled following bird flu outbreaks earlier in the year.

Story idea: Back-to-school shopping season is just around the corner, with several retail contacts indicating “that because of high inventories, the upcoming back-to-school season would feature more promotions than last year.” What discounts can your audience look forward to when they go out or online to buy books, pens, crayons and clothes, and how much of a savings do this year’s promotions represent over last year? On a related topic, read our coverage of academic research on state sales tax holidays.

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

Supply chain holdup

Labor remained in high demand and low supply in District 8, with one staffing firm “struggling” to fill two or three positions per day, down from 30 or more before the pandemic. A number of employers have had to “settle for less-dependable workers,” yet “contacts in several industries reported recent signs of the labor market easing.” Notably, “one public school district doubled its summer school teacher pay to $50 per hour.”

Manufacturing firms are having a hard time meeting demand for new production orders because of supply chain problems in part caused by ongoing COVID-related lockdowns in China “and persisting scarcity in intermediate inputs. This trend of intermediate input shortages has been observed across various industries, including cement in concrete, cotton in textiles, and wet strength resin in packaging.”

Story idea: Supply chain issues persist around the country, but the situation in District 8 appears to be especially dire. In Mississippi, one “major manufacturer” relayed that the supply chain problems are equal to those at the start of the pandemic, going so far as to say that “the wheels have fallen off.” Which manufacturing sectors are being most affected? Are everyday consumers unable to get certain products? The Mississippi Manufacturers Association would be a good source, along with the Mississippi Economic Council.

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

Extreme weather events

Some 36% of professional services firms in District 9 — think lawyers, architects and most other jobs that require a specialized advanced degree — bumped wages by more than 6% during the past year, with one financial services firm in Minnesota offering $5,000 “‘inflation bonuses’ to help offset rising consumer prices.”

Gas prices and inflation hampered foot traffic at two regional malls, according to contacts. Households with higher incomes were still spending at a fast clip, but households with lower incomes were having to make difficult spending choices. One supermarket contact “noted increased purchases of cheaper foodstuffs to offset higher costs overall.”

Story idea: Climate change isn’t just linked to high average temperatures. It also increases the likelihood of extreme weather events. (For more climate-related story ideas, read our coverage of how to find local stories in The Lancet’s health and climate change report.) While it is inadvisable for journalists to attribute a specific weather event to climate change, there are two recent, notable events that could form the cornerstones of a series on how extreme weather is affecting the district. Both have economic implications.

In the first example, tourism held strong overall in the district, but “a flood in the Yellowstone region of southern Montana was expected to have a major, negative impact on the region for the remainder of the summer season.” The second example shows the opposite extreme, with almost half of Montana’s winter wheat crop “in poor or very poor condition, as drought conditions persisted in the Golden Triangle region.”

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

Super-dry wheat

Some employers have offered their employees gas cards “to offset rising gas prices,” with others making “direct payments to workers tied to driving expenses.” Consumer spending overall was down a bit, with restaurant contacts in particular noting spending shifts and restaurant patrons being “less likely to choose more expensive locations in favor of lower cost options.”

There was less single-family construction in District 10 during the reporting period, along with less demand for residential mortgages. Note that the employment effects of weakening construction demand tend to lag: “For example, demand for crews doing framing for homes, which occurs early in construction, softened a bit while demand for skilled trades associated with the finishing of homes remains healthy.”

Story idea: District 10 also offers a real-world example of how our changing climate — specifically drought — is affecting the economy: “The condition of wheat in nearly all district states was exceptionally poor and could hinder revenues for many producers.” What is the future of wheat in the district? Is wheat production sustainable there, or is this a harbinger of a bleak wheat future for America?

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

Oil rig inexperience

Home sales “were off notably from earlier in the year,” with “eroded” housing market conditions overall and prices “largely flat.” Contacts observed that “both online and foot traffic slowed markedly.” Some sales were canceled “in part due to loan qualification issues” with the “negative” general outlook leading to less rosy sales forecasts.

Strong oil demand led to a higher rig count and more oil and natural gas production, but there were not enough workers and “supply chain constraints continued to limit the pace of drilling and well completion activity.” Engines, transmissions and other components crucial for fuel production were backlogged over a year, “and a severe shortage of steel tubular goods was reported.” While “uncertainty rose,” industry contacts were “largely optimistic,” overall.

Ranchers blamed “poor grazing conditions” for having to cut herd sizes, with agriculture contacts observing “that the strengthening dollar combined with higher transportation costs and logistics issues could negatively impact agricultural exports moving forward.”

Story idea: One oil field contact reports, “rig workers with no experience and working half the year were being paid about $85,000” because of the tight labor market. Oil rigs are already a dangerous environment. Are there safety implications at play with oil companies having to hire less experienced workers?

Workplace safety data lags and is, by definition, incomplete — not every injury or incident gets reported. But there are several places to find this type of data. Injury and fatality statistics from the U.S. Bureau of Safety and Environmental Enforcement are most recently available from 2020. The Occupational Safety and Health Administration also offers large data sets on serious injuries through November 2021 and less severe injuries through mid-March 2022. Both datasets include, but are not limited to, injuries workers sustained while performing oil extraction, refining and related activities. Oil pipeline firms are exempt from reporting less serious injuries to OSHA. The Bureau of Labor Statistics also conducts a variety of surveys capturing samples of workplace-related injuries.

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

Pampered, insured pets

With large tech firms like Apple, Alphabet and Meta slowing or stopping their hiring activity amid recession fears, several contacts in the industry noted hiring freezes “could make it easier for other businesses to attract experienced professionals in the field.” Also of note, several contacts observed “a pickup in unionization efforts in the retail and health-care sectors.”

Sales of durable goods, like furniture and appliances, “moderated noticeably.” Retail sales also slowed some, with “rising costs for food and fuel” being “particularly binding for consumers when deciding what to purchase.” Meanwhile, “pent-up demand for vacationing” led to strong sales for hotel rooms as well as international and domestic airplane tickets.

Agriculture in District 12 felt the ripple effects from Russia’s invasion of Ukraine, with increasing costs for “fertilizer, machinery, fuel and feed,” partially related to the war. As in other districts, supply chain problems remained a major concern, but “many contacts reported an easing of port backlogs and shipping rates despite increased fuel costs.”

Story idea: Demand for home mortgages and auto loans fell. Likewise, demand for insurance services “generally declined, with a notable exception being pet insurance.” What’s going on? Are people in District 12 having a pet insurance kick? The North American Pet Health Insurance Association may be a good first place to turn for statistics and cultivating pet insurance industry and consumer sources.   

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

The post Story ideas from the Federal Reserve’s Beige Book: July 2022 appeared first on The Journalist's Resource.

The central bank in the U.S., the Federal Reserve, is a data-heavy organization. Economists at the bank regularly crunch numbers to inform national decisions, such as setting target interest rates. Meanwhile, economists at the Federal Reserve’s district banks — there are 12 across the country — analyze local and regional data to provide research insights on specialized topics, such as economic inequality.

The Federal Reserve’s Beige Book offers a high-level, anecdotal glimpse of current economic sentiment in each of the central bank’s 12 regions. For journalists, it can serve as an extensive tip sheet with insights that can spur local, regional and national story angles.

During COVID-19, the Beige Book is especially valuable for business journalists, or any journalist assigned to cover business topics, because national and regional economies are changing rapidly. The book is compiled from reports from Federal Reserve district directors and interviews and surveys of business owners, community groups and economists.

Individuals surveyed are called “contacts,” and they are quoted anonymously. There’s no particular number of contacts needed to produce the Beige Book, but each release is based on insights from hundreds of contacts culled from surveys and wide-ranging conversations.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

Economists and analysts at district banks seek to cultivate contacts that can give a broad economic view — think the head of a trade group who regularly talks with many company owners — along with other contacts representing a variety of industries and company sizes. As a general overview of the economy in each district, the Beige Book is a contrast to other Federal Reserve informational products. It’s not the place to turn for specific, detailed data, like average mortgage rates. But each Beige Book edition, released eight times a year, contains story ideas.

According to the March 2 release, employer demand for workers remained strong nationally in the early part of this year as the quit rate remained historically high with almost 4.3 million workers leaving their jobs in January. Regarding inflation — which hit 5.2% in January, according to the core Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred measure — the central bank characterizes prices as increasing at a “robust pace” across the country. The reasons? The Beige Book explains it’s a combination of rising costs for transportation, raw materials and labor. Still, companies “reported an increased ability to pass on prices to consumers; in most cases, demand has remained strong despite price increases.”

The latest edition of the Beige Book compiles information gathered from Jan. 4 to Feb. 18. Note that Russia invaded Ukraine on Feb. 24, so commentary on stateside consequences from that invasion would not appear until the next Beige Book, due out April 20.

Keep reading for quick summaries from the March 2 Beige Book release, along with story ideas for each district.

District 1, Boston

Recreational vehicle boom

New and used car prices held high, but had “softened somewhat at recent auctions,” according to a New Hampshire contact in the auto industry. Meanwhile, firms that rely on computer chips for their goods reported “extortive” pricing from suppliers.

Restaurants saw their input prices — think the meat, dairy, produce and labor needed to make a dish — increase faster than at any time over the last four decades. Menu price hikes followed, but not enough to keep pace with input prices. The omicron variant of COVID-19 kept many people from going out to eat, especially in the Boston area. Lower restaurant profits followed.

Home and condo closings were down compared with last year. The condo sale slide was an about-face from the last Beige Book. “Several contacts interpreted the latest results as a return to normal seasonal patterns, together with the fact that in late 2020 the market had been unusually busy.”

Story idea: “Sales of RVs defied typical seasonal trends and remained robust throughout the winter,” according to the Beige Book. Reach out to local sellers of recreational vehicles to find out if they are part of the trend, or bucking it. Is there a coming “Summer of the RV” in New England, or will high gas prices keep them off the roads?

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

Zombie home rehab

A January hourly minimum wage hike of $1 in New Jersey and $0.70 in New York (outside of New York City) led employers in manufacturing, distribution and leisure and hospitality to proactively increase employees’ wages, “not just for workers at the [minimum wage] threshold but for those somewhat higher in the wage distribution as well to mitigate wage compression.”

Wage compression happens when the pay gap between lower-paid and higher-paid workers shrinks. As a simplified example, if a newly hired cashier suddenly makes as much as longer tenured cashiers, those long-term cashiers might take their customer service experience to better paid opportunities.

Omicron seriously hurt profits in the service sector, especially in New York City. But subway ridership ticked up in January and February, compared with December. City and statewide loosening of COVID-19 restrictions happened around the same time the Federal Reserve stopped collecting information for this Beige Book. Lifting vaccine check requirements for bars and restaurants, coupled with spring weather and falling Omicron case rates, could portend rosier profits ahead for the leisure and hospitality sector.

Trade show activity in New York City is also primed for a bump in March, according to the Beige Book. Still, overall jobs in the city might not rebound to pre-pandemic levels until 2025, according to a January report from the New York City Independent Budget Office.

Story idea: Residential home inventory is still low in upstate New York. “Housing affordability is a growing concern in the region, and efforts are underway to rehabilitate ‘zombie’ homes in some areas and convert some commercial space to residential.” Zombie homes are properties that have fallen into disuse and disrepair. Explore your local streets and see if there are renovation projects conducive to an article or series on zombie home rehabs.

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

Unrealized economic potential

Contacts from retailers and restaurants reported that rising costs for procuring and producing their wares were a threat to the modest overall growth they enjoyed during the period, while supply chain issues were “better” than the previous period, but remained “fragile.”

The multifamily housing market remained hot, partly because developers scrambled at the end of 2021 to qualify for an expiring 10-year property tax abatement for new housing in Philadelphia. “Contacts noted that the nearly 23,000 permitted units will not all be built, but that completing even a fourth of the total would put downward pressure on apartment rents and condo prices.”

Story idea: Banks, accountants and lawyers said clients from firms they serve remain uncertain about their business futures. “Many are flush with cash and making no big plans, except for automating where possible.” The big challenge: finding and paying for workers. What are state and local governments doing to help? It’s an important question because if firms can’t meet their customers’ demand for goods and services, that equals unrealized production and economic growth — including tax revenue, which can be directed to pay for education, housing, infrastructure or a host of other needs.

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

Educators cut class

Omicron hurt customer-facing businesses in early January, but “such disruptions quickly abated as the month progressed.” Generally, firms reported high employee turnover because more workers wanted to work remotely, make more money, pursue other careers or find firms offering better working conditions.

Some manufacturing firms heightened production by investing in technology to replace human workers, in response to employee turnover and higher wages. Freight logistics contacts complained of a lack of drivers and vehicle parts. “One contact said that a third of the firm’s drivers reduced their driving hours when awarded a higher wage, thus driving fewer miles while earning the same salary.”

Story idea: A contact from a university “expressed great concern that educators were leaving the profession in large numbers because the current work environment was ‘not what they had signed up for.’” No other details are given. Is teaching classes online “not what they had signed up for”? Are these mostly adjuncts and their pay is too low? Is there something else happening? Is the contact from a state or private university? Regardless, if higher education faculty are indeed leaving in droves, that’s worth exploring. Twitter feeds of local professors may indicate whether they have recently left their posts. If so, they may be willing to do an interview to share why they departed. Faculty union leaders or members of a university governing body would also be good sources to turn to. The Ohio Department of Higher Education provides a variety of data and reports — some recently updated, some not — that can serve as an introduction to the state’s university and college system. State-funded universities are subject to Ohio’s Public Records Act.

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

No degree needed

Companies that introduced flexible work arrangements still sometimes lost staff to firms offering higher wages or full-time remote work. There were a “small number” of non-manufacturing firms worried that customers would scoff at price hikes related to high shipping and energy costs.

Inventory was low and profitability high for auto dealers. Outdoor venues and ski resorts also did well, though tour bookings were down along with business air travel. Restaurants were busy “but many had to limit service because of a lack of staffing.”

Story idea: “Some employers were willing to loosen requirements on education and experience in favor of on-the-job training to fill open positions.” One firm that had required a bachelor’s degree in computer science was able to fill those roles with applicants without a bachelor’s degree. Talk to firms that have decided to bend a bit on their education requirements to see how those employees are working out and whether this warrants a rethinking of education requirements for certain jobs.

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

Shift surfing wave

Firms, on average, expect their per-unit costs to increase 3.7% year-over-year, according to the Atlanta Federal Reserve’s Business Inflation Expectations survey. “Many contacts continued to describe supply chain issues, particularly a dearth of available labor, as the driving factor behind rising costs.”

Transplants from the Northeast and West Coast kept home keys turning, with housing demand continuing to outstrip housing stock. Mortgage lenders loosened their credit worthiness standards for jumbo mortgages, though credit quality “remained healthy” among borrowers, generally speaking.

On the shipping front, sea ports, many of them in Florida, “experienced growing container volumes and new cargo vessel business as shipping lines shifted to east coast ports to avoid congestion on the West Coast.” Citrus farmers in Florida suffered a recent cold spell and “while damages are still being assessed” the cold weather is “expected to have a material adverse impact on citrus crop yields.”

Story idea: A contact from a high-end restaurant group reported letting staff “shift surf” across locations, to offer a more favorable work-life balance and to allow workers to seek specific shifts, like dinnertime, when they might reap better tips. But the program “ultimately resulted in staffing shortages at some establishments.” Every business decision is a push-and-pull. There are stories to be told exploring the pros and cons of workers now wielding a modicum of leverage over employers.

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

‘Planting decision dilemma’

Lawn and garden and appliance sales were robust. Home furnishings and electronics sales, however, fell a bit. Light vehicle sales rose, but sellers could have sold more if they had the inventory to keep up with demand. Many households shifted from “eating out to eating at home, as grocery sales moved up and food service demand declined.”

Home construction activity edged up, with one homebuilder reporting that “strong demand made it feel like the spring building season had already started.” Commercial residential construction orders kept demand for building materials slightly elevated.

Story idea: Corn and soybeans are major agricultural crops in District 7. Crop prices increased, but so did costs for fertilizers and herbicides critical for their production. “One contact pointed out a planting decision dilemma: Seeds that are more readily available do best when used with herbicides that are in short supply.” Corn in particular uses more fertilizer than other crops. Reach out to corn and soybean farmers big and small to find out how they have managed this paradox.

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

Change takes time

Wages are up in District 8. Some 65% of contacts report that they raised employee wages in recent weeks. Small firms, which operate on small margins, are having a hard time meeting market wages. Firms experiencing labor shortages are also having to pay for more overtime. One manufacturer estimates a “5% to 20% increase in labor costs from overtime and hazard pay.”

General retailers are still dealing with supply chain issues, with one Arkansas retailer only recently receiving a shipment that had been due in April 2021. One Louisville auto dealer reported having a hard time completing trade-ins of used cars for new ones because new vehicle shipments never came through. But another auto sales contact “expects prices to fall as inventories build up” over the coming weeks.

Story idea: Here’s an important reminder that price changes don’t happen out of thin air: “One retail contact reported that a shortage of in-store staff to physically change price tags has been an impediment to raising prices and that they had to enlist corporate employees to change price tags.” How much time does it really take to change price tags in a typical retail outlet? It’s a telling microcosm of the challenges that come with small business ownership.

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

Bullish minority entrepreneurs

District 9 businesses also struggled with staffing problems. There were “a surprising number of firms” that saw staffing levels fall because of turnover and “an inability to fill openings.” One transportation company contact in South Dakota said that the “amount of work I have to turn away due to lack of staff is staggering.” Wages pushed higher, “driven by recruitment and retention challenges, rather than workers’ inflation concerns.”

On the homebuilding front, residential construction levels didn’t change since the last Beige Book. One builder in Wisconsin was optimistic about business in 2022 but added that “if inflation is not curbed and supply chain issues are not resolved, the outlook is very pessimistic.” Building permits for single-family homes in Minneapolis-St. Paul was higher year-over-year, but permitting fell across other parts of the district.

Story idea: A positive story angle: Minority and women-owned business enterprise contacts are bullish on their business prospects. “A professional working with minority entrepreneurs in the Twin Cities said that the volume of microloans issued for new and existing businesses remained strong.” What is the current landscape of minority and women-owned businesses, in terms of where they are popping up and how they might transform the business environment in the Twin Cities and across the district? Two places to start talking to people: the Minority Entrepreneur Initiative at the University of Minnesota and the nonprofit Women Entrepreneurs of Minnesota. A database of active business names and addresses is available for $30 from the Minnesota Secretary of State. A search for individuals or organizations linked to business records costs $35 per search. Minnesota open records law states: “Money may be collected by a responsible authority in a state agency for the actual cost to the agency of providing copies or electronic transmittal of government data.”

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

Eroding bargaining power

Goods related to leisure activities have been snatched up at a high rate, though some retail contacts were concerned consumers had already bought years’ worth of those items. (How many Jet Skis does one household really need?) Many of those retailers are now “‘hedging their bets’ with regard to ordering inventory for the coming year, even though consumer demand remained high.”

Omicron slowed spending in general but it rebounded swiftly, and hospitality contacts “reported growth in plans to renovate and upgrade spaces to attract customers.” Building contractors are as busy or busier than before the pandemic, but “difficulties in sourcing materials are leading to costly redesigns or delays for their customers.”

Story idea: Fewer firms submitted bids for public and private sector building contracts, “eroding their bargaining power that would otherwise mitigate price pressures.” How is the lack of bidders for building projects affecting municipal coffers? Are other projects being shelved because of higher building costs? Check in with city and county contracting officers to find out.

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

Service sector staffing

Firms reported that the lack of applicants for open jobs worsened during the national Omicron surge in January. Key employees in the service sector were able to negotiate large pay increases. One bank raised its minimum wage to $18 an hour, “slightly mitigating retention issues.” Firms overall were more optimistic in February than in January, but still faced challenges. “Headwinds include uncertainty surrounding the path of the pandemic, supply-chain stresses and inflation.”

Much of the district dealt with severe drought. Demand for beef remained strong as cattle prices rose. Prices too rose for agricultural commodities (think any product that has to do with the earth, like fruits and vegetables, textile materials and meat) but costs to produce those goods also increased. There’s fear among producers that profits will shrink and “good yields will be important for their financial position this year.”

Story idea: While business in District 11’s service sector suffered along with the rest of the country, staffing services that place employees in the service sector “saw a pickup in revenues and broad-based, robust demand.” Why? Are workers turning to staffing agencies in order to help them secure positions that meet their needs for pay, working conditions and other considerations? Reach out to local staffing agencies to see if they’ve recorded more business, and what their applicants are looking for in their next job.

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

Mom-and-pop renaissance

Firms looking to fill high-skill jobs in accounting, architecture, technology and other areas “continued to compete intensely for talent.” Despite hiring difficulties, professional services by and large reported more client demand.

While overall retail demand remained strong, some stores “noticed that sales of high-end or discretionary goods declined somewhat due to price increases.” In Alaska and Utah, some employers had an especially hard time hiring, with candidates “who missed scheduled interviews and newly hired workers who failed to show up on the first day at their new job.”

Renters in multifamily buildings in major cities generally saw their rents increase. Residential real estate sales and construction “remained strong,” but one lender in Arizona reported that “lending conditions within traditionally underserved communities remained quite tight.”

Story idea: “In the Mountain West, a contact mentioned that local and regional firms expanded into locations vacated by national brands.” Travel around your coverage area and observe. Are more storefronts sitting vacant that were once occupied by national retailers and restaurant chains? Are local or regional businesses planning on taking their place? If so, it could signal a renaissance of sorts for mom-and-pop stores — or, at least for regional retailers with a more refined understanding of community needs than national brands typically offer.

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

The post Story ideas from the Federal Reserve’s Beige Book: March 2022 appeared first on The Journalist's Resource.

The central bank in the U.S., the Federal Reserve, is a data-heavy organization. Economists at the bank regularly crunch numbers to inform national decisions, such as setting target interest rates, which the Federal Reserve Open Market Committee does during scheduled meetings. Meanwhile, economists at the Federal Reserve’s district banks — there are 12 across the country — analyze local and regional data to provide research insights on specialized topics, such as economic inequality.

Much of the bank’s vast universe of data, compiled from more than 100 U.S. government and international sources, is available to the public and easily searchable. From gold prices to wood pulp prices, the bank offers more than 815,000 data series. In addition to being a reliable source of economic data, the bank publishes a semi-regular report journalists covering a range of beats — from business, to education, to city and county government — should know about: The Beige Book.

The Beige Book is an anecdotal counterpart to the bank’s suite of hard numbers. It offers a high-level glimpse of the current economic sentiment in each region, based on reports from Federal Reserve district directors and interviews and surveys with business owners large and small, community groups and economists. Individuals surveyed are called contacts. There’s no particular number of contacts needed to produce the Beige Book, but each release is based on insights from hundreds of contacts culled from surveys and wide-ranging conversations.

The Beige Book was first publicly published in the 1980s with a beige colored cover. Find the archives here.

Formally known as the “Summary of Commentary on Current Economic Conditions,” the Beige Book comes out eight times yearly. Each district summary includes write-ups on nationally important topics, like employment and wage conditions, prices, consumer spending and manufacturing. Some districts include industries that are regionally important. For example, the Atlanta district summarizes economic conditions in the regional transportation sector, since it includes major shipping ports and rail yards along the Atlantic and Gulf coasts, as well as Hartsfield-Jackson, the nation’s busiest airport. 

Economists and analysts at district banks seek to cultivate contacts that can give a broad economic view — think the head of a trade group who regularly talks with many company owners — along with other contacts representing a variety of industries and company sizes. As a general overview of the economy in each district, the Beige Book is a contrast to other Federal Reserve informational products. It’s not the place to turn for average mortgage rates — but, each Beige Book release contains germs for story ideas.

Sometimes, story ideas can be unearthed from a single sentence buried in a district summary. During COVID-19, the Beige Book is especially valuable for business journalists, or any journalist assigned to cover business topics, because national and regional economies are changing rapidly.

Take the July 14 release, which discusses economic conditions from late May to early July. The U.S. economy was generally strengthening as millions more Americans got the COVID vaccine. The big story then? Overall optimism, but there were labor shortages across the board and particularly for in-person jobs like retail and restaurants, where workers were demanding higher wages.

Compare that sentiment with the Sept. 8 release, which covered early July through August. Since July, the Delta variant has torn through parts of the U.S. with relatively low COVID-19 vaccination rates. Labor scarcity remained pronounced and a major barrier to overall business growth. A microchip shortage continued to put a dent in auto sales, despite high demand. The economic outlook in nearly every district continued to improve, but was tamped by the prospect of a pandemic with no clear end in sight.

“Some Districts noted that return-to-work schedules were pushed back due to the increase in the Delta variant,” according to the September release. “With persistent and extensive labor shortages, a number of Districts reported an acceleration in wages, and most characterized wage growth as strong — including all of the midwestern and western regions. Several Districts noted particularly brisk wage gains among lower-wage workers.”

Keep reading for quick summaries and story tips from each district, based on the September Beige Book.

District 1, Boston

A ‘golden age’ for semiconductors

Homeowners looking to sell are enjoying a market experiencing “exceptional strength characterized by high prices and low inventories,” according to the September Beige Book. The outlook is less rosy for those looking to rent out office space, with “slow and even ‘anemic’ conditions” in that market.

Employers are more concerned with unfilled positions than workers demanding higher wages. Some employers reported that “hiring was equally difficult for high wage workers and workers in states which had discontinued [unemployment insurance].” The logistics industry could be particularly strong for job seekers: “One contact said that pay had doubled for logistics specialties.”

Story tip: Auto dealers in several other districts are seeing weaker sales. That’s in large part because of a global microchip shortage limiting the production of new cars. But, in District 1, companies “connected to the semiconductor industry reported exceptional strength with one referring to the current period as a ‘golden age’ for the industry.” Reach out to semiconductor manufacturers to see if there’s a story worth exploring on the flipside of the microchip shortage.

District 1 covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and most of Connecticut.

District 2, New York

The (still) evolving future of work

Businesses across the district want to add employees, but in New York City, job seekers are looking for higher compensation and flexible hybrid work options. Sales positions are in demand in upstate New York, with one employment agency there indicating “a slight increase in hiring activity — particularly for salespeople,” while noting generally that businesses “have been increasingly looking outside the region for candidates.” Auto dealers are facing a “severe shortage of auto inventories” because of microchip scarcity.

Tourist dollars slowed a bit in some parts of the district since the July Beige Book, but in upstate New York, “outdoor events, such as the state fair, have been well attended, contributing to a brisk summer tourism season.” In New York City, some major events, like the International Auto Show at the Jacob K. Javits Convention Center, were cancelled over concerns about the Delta variant and federal restrictions on foreign travel.

Story tip: The office market in New York City is weak, with “record-high sublet space available and rents still trending down.” But while many firms “have reduced their footprint in Manhattan or plan to do so,” some “large tech companies” have picked up leases. Could the future of office viability in the city lie with those tech firms? New York Federal Reserve analyst Jason Bram, who produces regional Beige Book reports and researches commuting patterns, would be a good source to find out more.

District 2 covers New York, western Connecticut, northern New Jersey, Puerto Rico and the U.S. Virgin Islands.

District 3, Philadelphia

‘Belligerent customers’

Workers and employers alike are burned out, with the labor shortage forcing “smaller retail and restaurant owners back to the register, the kitchen, and the dish room.” Logistics are a problem for business owners. One restaurant chain had to rent refrigerated trucks to make deliveries after major delays from its regular distributors.

Firms are still figuring out how to match wages they can afford with wages employees want. Some manufacturers are turning to automation in lieu of hiring humans. “Two manufacturing firms reported opposing results from offering a $20 an hour wage — one noted improved hiring at all locations, another reported no applicants.”

The microchip shortage significantly cut into new auto sales. “Contacts opined that the situation may continue until at least next summer.”

Story tip: Some contacts from firms that sell goods and services directly to the public “noted a rising number of belligerent customers.” Ask local restaurants and other public-facing service employers whether customers are becoming increasingly hostile. If so, why?

District 3 covers most of Pennsylvania, southern New Jersey and Delaware.

District 4, Cleveland

More frequent raises — and higher prices?

Many employers aren’t sure they’ll be able to staff up in the coming months, even for higher-skill jobs. “One producer of industrial robots expected it would take four to five months to hire 20 semi-skilled manufacturing techs, a timeline which would be far longer than typical.”

Home prices are high in the district and the market for buyers is competitive, but “homebuilders were concerned that persistent supply chain disruptions were inhibiting new home construction.” In-store retail business has ticked upward in recent weeks for general merchandise and apparel stores. With schools returning to in-person learning, “back-to-school sales were stronger than in 2020 and were in line with 2019 sales,” according to a department store contact.

Story tip: Raises are happening more often, with one trucking firm reporting “it had already given five pay raises this year.” Will prices rise along with wages and other costs? “Many contacts indicated they were passing through higher labor costs to customers, not just higher costs for materials and freight services as in recent surveys.”

District 4 covers Ohio, eastern Kentucky, western Pennsylvania and northern West Virginia.

District 5, Richmond

Follow the wedding dresses

Raises are happening here, too, with one manufacturer reporting that “they not only increased starting wages but also offered guaranteed raises after three and six months.”

A major region for shipping, rail delays combined with a lack of truck drivers meant some freight containers were left sitting at ports for “an extended period of time” before moving inland. Months back, passenger planes were being used for cargo. But with air travel picking up, the number of cargo flights has dropped.

Story idea: Consumers in the district want to buy furniture and other home goods, as well as clothing, but retailers “noted shortages of and increased lead times for merchandise, particularly on foreign-made goods. One contact reported refunding several bridal parties because dresses did not arrive on time for weddings.” Find out if this is a trend — are local wedding shops having trouble keeping enough inventory? If so, how are couples dealing with wedding dress snafus?

District 5 covers Virginia, Maryland, the Carolinas, most of West Virginia and the District of Columbia.

District 6, Atlanta

The ‘gray wave’ and ‘ghosting coasting’

The lack of workers is leading to real problems for businesses, with “projects placed on hold, store hours reduced” and restaurant menus being “slimmed down.” Employees juggling their jobs and young children may be facing challenges. Some childcare centers that are struggling to hire have closed their infant rooms “because they require a greater number of caregivers.”

There were “record container volumes of imported goods” at regional ports, along with “robust freight shipments” for trucking companies and increased demand for rail, even as “dwell times in rail yards increased.” Air cargo demand was “steady” but “there was growing uncertainty surrounding the impact of COVID-19 outbreaks on activity.” Supply chain contacts think logistics disruptions will persist for up to another six months.

The prognosis for Florida fruit: “On a month-over-month basis, the production forecast for Florida’s orange crop was up in July while the grapefruit production forecast was unchanged; both forecasts remained below last year’s production levels.”

Story idea: Why are employees “ghosting coasting” and how is the practice affecting businesses? Ghosting coasting is when “a new hire works for a few days and moves on to the next restaurant,” without giving notice, according to the September release. Plus, as hospitals strain to keep up with COVID patients, some health providers may be contending with a “‘gray wave’ of early retirements, particularly among nurses.”

District 6 covers Alabama, Florida, Georgia, eastern Tennessee, southern Louisiana and southern Mississippi.

District 7, Chicago

Shortage of farm equipment parts could mean soy, corn delays

Back-to-school shopping was strong, and milk producers facing “lower margins as transportation costs rose” were hopeful that “reopening schools would boost bottled milk demand.”

A “service that analyzes consumer foot traffic in brick-and-mortar stores indicated that activity in the Midwest had recovered to pre-pandemic levels.” Consumer prices are up “robustly,” related to higher energy, labor and transportation costs.

“Most manufacturing contacts reported that business was above pre-pandemic levels, and many were running at full capacity.” Still, some manufacturers lack basic supplies, including “aluminum, steel, copper, plastics, paints, pallets, paper, glue,” and, yes, microchips.

Story idea: Corn and soybean harvests were “expected to be near record levels,” but there could be trouble getting those crops to consumers. “Concerns grew that strained logistics would lead to shortages of parts for farm equipment during harvest and clog the movement of crops to markets.” Which parts specifically are in short supply? What’s the supply chain story — are the parts made of a raw material that is being held up?

District 7 includes Iowa, most of Indiana, northern Illinois, southern and central Michigan and southern Wisconsin.

District 8, St. Louis

The worker shortage and consumer protection

Six in 10 employers contacted had raised wages, “well above historical values.” A starting wage of $17 an hour wasn’t enough for one manufacturer to attract the number of workers it needed.

One construction contact reported prices for concrete are up 20%, “and the price for electric wire has rapidly increased.” Costs of other input materials, like polycarbonate, aluminum, steel, wood and electrical parts are “skyrocketing,” according to an electrical sign and billboard sales firm.

Relevant to an economic region where beer is big business, one brewery “reported that their supplier increased prices twice between order and delivery for a pallet of aluminum.”

Story idea: Could the worker shortage be affecting consumer safety? A paucity of employees has “led to issues in quality control, with surges in retail returns and auto repairs due to product defects.” Are retail shops and auto sellers dealing with more returned products than usual?

District 8 includes Arkansas, southern Illinois, southern Indiana, western Kentucky, northern Mississippi, central and eastern Missouri and western Tennessee.

District 9, Minneapolis

Not enough hay

While firms generally “reported continued difficulty attracting labor,” companies were also “upbeat regarding future hiring. A mid-August survey of construction firms across the District found that 70 percent have been hiring in some capacity of late.”

Still, the overall lack of workers is causing burnout among those who have a job, with some feeling “overworked and tired.” In the Twin Cities, low-wage workers are stressed about their ability to pay for food, housing and utilities. In Montana, job seekers are worried about housing and childcare affordability. An auto dealer there reported “solid” demand but low inventory, like in many other districts.

Story idea: Severe drought is weighing on the minds of livestock and dairy farmers. They’re particularly “suffering from the drought’s impact on hay availability and pasture conditions, while corn and soybean crop conditions were deteriorating.” Is there a visual story to tell of how the drought is affecting livestock and dairy farmers?

District 9 includes Minnesota, Montana, the Dakotas, Michigan’s Upper Peninsula and northern Wisconsin.

District 10, Kansas City

High on the hog, low on the cow

Manufacturing employees continued to leave their jobs for better pay at other firms, or were retiring. Manufacturing firms looking to hire “noted that the number of applications for open positions was low, and that applicants often lacked requisite qualifications or were not willing to accept offered levels of compensation.”

Food manufacturers slowed production because they lacked workers, despite high demand. While restaurants and hotels did well in July and August, “several contacts noted that reservations were down in recent weeks more than anticipated,” and rising COVID rates could slow their sales in the coming months.

Story idea: A tale of two agricultural sectors. Prices for pig products “remained at multi-year highs,” but “profit opportunities for cattle producers remained limited.” Meat packers can’t hire enough workers and have had to limit production. Then there’s the drought, which has led to poor conditions for almost two-thirds of pasture and range land in Wyoming, “compared with about 30% in Colorado and New Mexico and 20% or less in all other states” in the district.

District 10 includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico.

District 11, Dallas

Health care staffing problems in COVID hot spots

Leisure and hospitality firms remained “positive” on their short-term outlooks, but were “less optimistic in August than in prior periods as the surging Delta variant, persistent labor and supply shortages, and rising costs are expected to dampen the economic recovery.”

A lack of interest in office space will remain an issue, “due to the fallout from work-from home policies, and contacts do not expect much improvement in the near term.” While companies are not necessarily rushing back to the office, many are still looking to hire. A survey the Dallas Federal Reserve took of more than 350 Texas businesses “showed that about 70% were trying to hire in August, and the vast majority named a lack of applicants as an impediment.”

The district is a major energy producer, and orders are up for new oil drilling equipment. “Contacts generally felt that current oil and gas prices are sufficient for producers to meet capital expenditures goals and even slightly grow production.”

Story idea: For a region where health care systems have been overwhelmed by recent COVID cases, the news could get grimmer still because of hospital staffing issues, especially nurses. “Hospitals also reported a lack of a large-scale return of applicants for low-wage positions, despite the end of federal unemployment benefits,” according to the September Beige Book.

District 11 includes Texas, northern Louisiana and southern New Mexico.

District 12, San Francisco

SPAC party over?

It’s a job seeker’s market with “contacts in the transportation, manufacturing, construction, hospitality, and retail sectors mentioned having many unfilled positions.”

But turnover is high, “with one contact in the hospitality sector observing that almost half of new employees quit after only one or two months on the job.” Prices are rising, too, with producers passing along higher logistics and labor costs to consumers.

The Pacific Northwest is facing a “shortage of undeveloped land” for homes, according to several contacts surveyed. Sawmills there have “curtailed hours and shifts in the past several weeks” with lumber supply outstripping demand after “a year of strong growth.”

Story idea: Special Purpose Acquisition Companies have made for hot business stories in recent months. SPACs, as they’re known, are companies that do nothing but raise money by going public on a stock exchange — with an eye toward purchasing an existing company. The concept has been around for years but turned popular in 2020. Could the SPAC trend be slowing? “A contact in Southern California observed that while SPAC activity decreased dramatically in recent months, investor interest in sustainability and clean energy technology remained high,” according to the September release.

District 12 includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, American Samoa, Guam and the Northern Mariana Islands.

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