We'll start the day with a bit of levity, https://x.com/Josh_Ward/status/1875196844403458379.
The Fed's Beige Book out yesterday was littered with the words 'moderately,' 'modestly,' and 'slightly' when discussing economic activity, the state of the labor market, the pace of consumer spending and the rate of inflation, among other things. I bolded it where I saw it.
The first sentence read, "Economic activity increased slightly to moderately across the 12 Federal Reserve Districts in late November and December."
Post big upside surprise in the BLS report seen Friday, the Beige Book said "Employment ticked up on balance, with six Districts reporting a slight increase and six reporting no change." Doesn't sound like a 256k headline job gain. Sounds like something with a one handle instead.
With inflation, "Prices increased modestly overall, with growth rates ranging from flat to moderate."
On the consumer, "Consumer spending moved up moderately, with most Districts reporting strong holiday sales that exceeded expectations."
I'll add some more comments here focusing on the labor market and consumer spending within specific Districts in order to give more color.
Boston:
"Employment was roughly steady, and wages increased modestly on average...No contacts mentioned plans for major changes in hiring or wages in 2025."
"First District retail contacts reported slight increases in revenues in recent months, while tourism activity experienced modest growth on average...Contacts expected robust tourism and convention activity for Boston for 2025. The outlook for retail and restaurant activity was more cautious, as contacts in those businesses expected roughly flat activity going forward.
NY:
"Employment in the region continued to grow slightly, on balance...Still, there were no mentions of major layoffs in the District...Demand for workers picked up a bit, following an election-cycle pause, despite what is usually a slower time of the year."
"Consumer spending increased moderately since the last report...Higher-end items and brands, as well as beauty and fragrance items, continued to sell well, although consumers continued to seek value and responded strongly to discounts during the holiday season."
Philly:
"Employment increased slightly, after rising modestly last period...Staffing contacts reported little change in the demand for their services and noted little wage pressure. Several contacts reported that their clients had imposed wage freezes, layoffs, or cutbacks on shifts."
"Consumer spending also rose slightly, despite price-conscious consumers; auto sales increased the most."
Cleveland:
"Contacts reported that employment levels were flat overall in recent weeks, a trend which is largely unchanged from those seen during the previous four reporting periods. Among firms that were maintaining flat headcounts, several said that they were fully staffed to meet current demand, while others were focused on replacing departing workers...Overall, contacts expected modest employment growth in the months ahead."
"On balance, consumer spending increased moderately in recent weeks after a period of decline over several reporting periods, and contacts generally expected sales to increase modestly in the coming months. Most reports of stronger sales were centered on holiday shopping, and one grocer noted that "customers appear[ed] willing to spend more this holiday season."
Richmond:
Keep reading with a 7-day free trial
Subscribe to The Boock Report to keep reading this post and get 7 days of free access to the full post archives.