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."
