Beige Book: Economic activity continues to expand in New England

ECONOMIC ACTIVITY in the First Distrcit, overseen by the Federal Reserve Bank of Boston, was said to have expanded at a moderate to strong rate since the last report in September. / COURTESY FEDERAL RESERVE
ECONOMIC ACTIVITY in the First Distrcit, overseen by the Federal Reserve Bank of Boston, was said to have expanded at a moderate to strong rate since the last report in September. / COURTESY FEDERAL RESERVE

PROVIDENCE – In the Federal Reserve’s October Beige Book report, the Fed noted that economic activity expanded at a moderate to strong pace in all sectors in the First District, overseeing New England.

The economic activity of most of the country was said to have expanded at a modest to moderate pace.

The report said that the Fed’s contacts in the region reported that labor markets remained tight in the area, with a slight increase in headcounts and a small acceleration in wage growth.

Some local prices were said to rise, according to retailers, due to tariffs and due to rising trucking prices. Manufacturers also reported charging higher prices due to rising labor costs and higher input prices for goods and services that have been affected by tariffs.

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Manufacturers also reported that, so far, the rising prices have not affected sales. Retailers also reported a moderate to strong year-to-year increase in sales. However, retailers also reported being concerned that rising prices may curb sales going forward.

Commercial leasing in the Providence area was said to have slowed. However, vacancy rates in the area remained low, reflecting positive net absorption in the metro area. Risks were seen in the region at large due to rising construction costs and rising long-term interest rates.

The Rhode Island residential housing market was reported to have slowed, with single-family home sales falling “moderately” and pending sales “down sharply.” Home inventories in the Ocean State were noted to have increased.

Condo prices in Rhode Island were noted to have declined slightly, despite condo prices rising in all other markets in the district.

Overall, the Fed described the regions outlook as “cautiously optimistic.”

Chris Bergenheim is the PBN web editor. Email him at Bergenheim@PBN.com.

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