Fed report: Weak Western economy dampens tourism, healthcare, worker pay

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The Federal Reserve’s latest report on regional economic trends is out today, and the picture overall is of a U.S. economy that wasn’t sinking in August but was mired in muck.

‘Reports from the twelve Federal Reserve districts indicate that the pace of economic activity has been slow in most districts,’ the Fed said in the so-called beige-book report. ‘Many described business conditions as ‘weak,’ ‘soft’ or ‘subdued.’ ‘

Here are some of the report’s more interesting highlights of what was happening in August in the Fed’s Western region, which encompasses California as well as Alaska, Arizona, Hawaii, Idaho, Nevada, Oregon, Utah and Washington:

--- Retail sales of furniture and household appliances were described as ‘exceptionally poor’ in the West, obviously reflecting the ongoing housing bust in California, Arizona and Nevada. But we’re still getting our geek on out here: ‘Consumer electronic products continued to sell well in general.’

--- Tourism was ‘flat to down in major tourist destinations such as Southern California and Las Vegas and down significantly in Hawaii.’

--- The report flagged tougher times in the region’s healthcare biz, perhaps indicating that strapped consumers are foregoing some medical care: ‘Healthcare providers reported a drop in demand, with some medical centers reducing staff counts in part by leaving vacant positions unfilled.’

--- ‘Manufacturing activity was mixed across sectors but appeared to expand overall. Production activity was at high levels for makers of commercial aircraft and parts as they continued to work through extensive order backlogs. Makers of semiconductors and other information technology products saw moderate sales gains and high rates of capacity utilization.’

--- The agriculture industry still was going strong. ‘Sales continued at a brisk pace for most crops, especially those with extensive overseas markets such as grains and cotton, and sales of livestock products were reported to be at record levels.’

--- Western consumers were paying more for stuff, while pay was rising at a slower rate as the ranks of the unemployed swelled. ‘Upward price pressures remained significant,’ as higher costs for food and energy ‘continued to exert upward pressure on prices for related final products.’

But on the pay side, ‘upward wage pressures eased further. Firms in most sectors have been reducing staff counts through layoffs or attrition, with particularly pronounced drops continuing in the construction, finance and real estate sectors. The resulting labor market slack has reduced upward wage pressures in general.’