FED's Beige Book: Hang in there America

The FED today relesaed its Beige Book and from one's point of view, the main focus was in sending out a message of confidence, signaling that though weak, there's still some growth in the economy. Nevertheless, there was also a strong emphasis on the fragility of this growth and how economic indicators could flip in no time.

Mostly, the risks are shown in the near-term, but on the bright side, this time the FED changed its statement from "we didn't see this coming" to "ok, we're hanging in there".

The most common words used were "mixed" "modest" "uncertainty" "increased slightly"... 

Here are some of the pinpoints taken directly from the Beige Book:

• Economic activity continued to expand at a modest pace (in past statements the FED used the phrase "weaker than expected")
• Consumer spending increased slightly in most Districts.
• Non-auto retail sales were flat or down.
• Demand for services generally positive
• Manufacturing mixed across the country
• Residential real estate remained weak overall (in past statements the FED used the word "depressed")
• Commercial real estate and construction weak, but improvements were noted in several areas
• Inflation edged lower.
• Software and IT firms in Boston reported mixed activity since July but expected to return to previous strong growth patterns by late 2011.
• San Francisco District showed expanded sales for technology providers... higher demand on software, e-books and mobile applications
• Manufacturing: Pace of activity slowed in many Districts.
• Loan demand stable or slightly weaker... Loan quality generally improving and credit standards unchanged.
• NY indicated delinquency rates increased on most categories and banks tightened standards for commercial mortgages and industrial loans
• Labor markets generally steady. Jobs in healthcare continued to increase
• Fewer  price preassures (but) food prices climbed highe

Overall, I'd say the FED changed drastically the tone from "depressed" to "steady", which is a good sign. The problem is, economic conditions are still fragile, and a hit from Europe's debt could create another downward spiral for the U.S. economy. Good to know, today the Italian Senate approved the austerity measures proposed by Berlusconi, so that'll create some stability in the near-term.