Advisor Voices: April’s Beige Book
23 April 2019
Beige, a French word, is defined by Merriam-Webster as “a variable color averaging light grayish-yellowish brown,”—a rather large color spectrum. The Federal Reserve’s monthly The Beige Book: Summary of Commentary on Current Economic Conditions looks into economic conditions through collected anecdotal information from businesses and community organization across the 12 Federal Reserve Districts. Like the color beige, our diverse nation can present quite a spectrum at times. Below is a map of the districts with their respective major cities.
The most recent publication of the Federal Reserve’s The Beige Book on April 17th actually presented a pretty uniform color, with all 12 districts reporting growth at an overall slight-to-moderate pace. Consumer spending was mixed, being somewhat slower for retailers and auto dealers, but better for tourism and home sales. Manufacturing grew at a modest-to-moderate pace, and while tariffs weighed on many minds, some noted that recent progress on trade deals improved their outlook. Labor markets remain tight with employment increasing, putting pressure on wages. Finally, despite reports of higher input costs from freight, tariffs, and wages, prices only rose at a modest pace.
While not wildly exciting, April’s 32-page report is yet another sign that we may continue to see modest growth across the country. In the chart below, I have attempted to summarize the Beige Book, and add a little more “color” to the different sections that contribute to the overall health of regional economies, with green representing positive conditions, beige for mixed conditions, and red meaning negative conditions.
Just as each member of the Federal Reserve makes his or her own assessment of the report, this exercise is somewhat subjective. However, it shows a positive outlook for the economy, employment, and manufacturing. Input prices are pressuring most segments of the economy, but businesses have had difficulty passing these on to consumers, who in turn, are generally not increasing spending. With the Fed less concerned about inflation, this report is unlikely to color its decision around interest rates, which they have said should remain stable for the near-term.
Past performance is no guarantee of future results. Opinions are as of the publication date, subject to change and may not come to pass. This is for informational purposes only and shouldn’t be considered investment advice.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Calamos Wealth Management LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.
Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Calamos Wealth Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/ her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Calamos Wealth Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. If you are a Calamos Wealth Management, LLC client, please remember to contact Calamos Wealth Management, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Calamos Wealth Management, LLC’s current written disclosure statement discussing our advisory services and fees is available upon request