The American economy expanded at a “modest to moderate pace" in the six weeks since the last Federal Reserve Beige Book was issued on June 5th.
No surprise here. It has been two years since the American economy has done anything else.
The Fed has used "modest" or “moderate” singly or in combination to describe the overall condition of the U.S. economy in every Beige Book since July 27th, 2011. These are sixteen reports where the U.S. economy has been essentially unchanged.
The Fed has taken a good deal more freedom in describing the labor market, using a variety of terms, but the judgment on the state of employment is almost as limited.
In the sixteen reports over the past two years, 'employment', the 'labor market' or 'hiring' have been characterized as "increased", "improved" or with "gains" , usually modified with "modest", "measured" or "slight" ten times, including the last four Beige Books, and "unchanged”, “soft", “subdued" or "tepid", the remaining six.
In five reports the labor economy was thought to be either holding steady or improving; in none of the reports was employment shrinking or growing strongly.
The Beige Book is a compilation of anecdotal reports from the 12 Federal Reserve districts assembled about every six weeks to inform the discussion at the subsequent FOMC meeting, in this case on July 30th and 31st.
Whatever Chairman Ben Bernanke and the various Fed Governors may say about monetary policy now or in the future, one thing seems certain.
If they are basing policy on their own assessment of economic conditions, very little has changed in the past two years.
Chief Market Strategist