What's Your Economic Outlook?

In Pictures: What's Your Economic Outlook?

You know the economic outlook for much of the country is rough, with unemployment rising, home prices falling, credit short and manufacturing, retail and services all in decline. Bad news indeed. But--surprise--there are bright spots across the country.

According to the Federal Reserve's Beige Book report on regional economies, released Wednesday, areas around Boston, St. Louis, Chicago and San Francisco have seen increased demand in aerospace manufacturing. St. Louis, Dallas and San Francisco saw gains in food processing. Most of the Midwest has seen agriculture hold up well, and in Nebraska and Kansas, farmland prices continue to rise.

The Great Plains and East Coast (particularly around the mid-Atlantic) have seen relatively stronger demand for lower- and middle-priced "starter homes." The troubles of New York banks have actually led to increased volumes for banks in Pennsylvania and Ohio, as people turn from the national chains to regional firms.

Eight times a year, the Fed collects surveys from the 12 Federal Reserve districts, representing every region of the country. On Tuesday, the Bureau of Labor Statistics released its first look at unemployment in the country's metro areas for the month of October. Together, these two reports were the first deep look into how parts of the country are doing in the wake of this summer's banking implosion.

Though the regions are named after the city in which the Federal Reserve bank is located, they represent broader regions. Because the system was established nearly a century ago, the regions are not equally sized. The Boston Fed's domain is only the Northeast, whereas the San Francisco Federal Reserve covers the entire West Coast. But activity reported by the Fed's different districts represents the activity of entire regions, not just the central cities. (See a map of the Federal Reserve districts.)

The mood of the Fed's report is, on the whole, grim. In the dry parlance of the Fed report, New York's economy "deteriorated substantially"--worse than San Francisco's "weakened decidedly." Both regions would have been happy with the Fed's appraisal of Philadelphia's economy which "remained generally weak" or Boston's, which merely "slowed further."