Shippers of retail goods and cargo related to the housing industry, along with transportation providers, got a dose of goods news from the Federal Reserve on Wednesday.
The Fed said U.S. economic activity in most parts of the country expanded “gradually” in July and early August, as retail sales and the housing industry took up some of the slack from the slowing manufacturing sector. The Beige Book, a collection of reports from the Fed’s 12 districts, suggests U.S. economic growth is slowing but not heading for a double-dip recession.
“Six districts indicated the local economy continued to expand at a modest pace and another three cited moderate growth; among the latter, Chicago noted that the pace of growth had slowed from the prior period,” according to the Beige Book survey.
The districts reported generally positive demand for transportation services. Railroad contacts told the Atlanta district that intermodal shipments continued to increase, and the Dallas District also saw an increase in cargo freight hauling. Both districts said lumber shipments also rose.
"Atlanta and Dallas also reported steady to increasing demand for trucking services, whereas logistics firms and carriers in the Philadelphia district reported a relatively sluggish start to the traditional 'freight season,'" according to the report.
The “mixed” report for manufacturing growth — with Boston, Chicago, Kansas City and San Francisco districts seeing increased activity — parallels recent U.S. manufacturing indices. For example, the Manufacturers Alliance for Productivity and Innovation’s June quarterly index showed growth slowed in the second quarter. Six districts reported demand for manufacturing goods was declining, but none of them reported a “dramatic fall.”
Several districts reported a rising demand for lumber, PVC, cement and home goods, as “real estate markets were generally said to be improving,” according to the report. All of the districts saw an increase in home sales, home prices or home construction.