Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=220234
Story Retrieval Date: 10/31/2014 8:15:13 PM CST
The Federal Reserve's Beige Book reported moderate economic growth nationally, but only "modest" growth in the Chicago region, despite gains in housing construction and employment.
The Chicago region comprises Iowa, most of Illinois, Indiana, Michigan and Wisconsin. It encompasses a considerable part of the nation’s manufacturing base as well as significant agriculture production and food processing.
“Illinois had been lagging the nation, and I expect that to continue," said Brian Wesbury, chief economist at First Trust Advisors L.P., a financial services firm in Wheaton, Ill. "It’s a plow horse economy, it’s not a race horse, unfortunately.” He said that while the state's growth will continue to improve, it’s not going to spring ahead anytime soon."
Ben Keys, a professor at the Harris School of Public Policy at the University of Chicago, commented while the rate of growth "is slightly faster in other places, moderate is still pretty slow," and the "modest" growth in Illinois "is quite slow.”
The Chicago region's demand for residential construction rose, reflecting confidence among homebuyer, according to the Beige Book. Hiring is continuing to increase and labor conditions improved, especially for young college graduates.
“For graduates willing to move and go where there are jobs are, there’s more opportunity. It’s slightly improving. It seems to be a better environment overall,” said Wesbury.
Nationally, industries tied to automobile and residential sales remained strong, moderately increasing since February, according to the report. The tourism and travel industry continued to gain strength on a national level as well.
While retail spending increased across the nation, Chicago’s retail spending declined.
Keys said that despite the decrease in spending, consumers still believe in overall economic improvement. “Consumers have the same sort of perception that things are improving, but they are not improving so rapidly that they are going to change their minds about the overall outlook or overall spending patterns in any dramatic way,” he stated.
Cold weather delayed agriculture fieldwork in the Chicago region, but there is little concern that planting would be seriously delayed, according to the Beige Book.
“The bottom line is were going to see improvement in every area of the Illinois economy in the months ahead,” said Wesbury.
The Being Book, officially called the Summary of Commentary on Current Economic Conditions, is published eight times a year. The report provides anecdotal data on business conditions in different regions around the United States.
The Federal Reserve Bank of Dallas prepared, collected and prepared the information for the current report, which covers the period ending April 5. The next Beige Book report will be released in early June 2013. For more information visit http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201304.htm