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Wednesday, April 15, 2020

Fed's Beige Book: "Economic activity contracted sharply and abruptly"

by Calculated Risk on 4/15/2020 02:04:00 PM

Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Boston based on information collected on or before April 6, 2020."

Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic. The hardest-hit industries—because of social distancing measures and mandated closures—were leisure and hospitality, and retail aside from essential goods. Most Districts reported declines in manufacturing, but cited significant variation across industries. Producers of food and medical products reported strong demand but faced both production delays, due to infection-prevention measures, and supply chain disruptions. Some other manufacturing industries, such as autos, mostly shut down. The energy sector, suffering from low prices, reduced investment and output. Districts reporting on loan demand said it was high, both from companies accessing credit lines and from households refinancing mortgages. All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months.
Employment declined in all Districts, steeply in many cases, as the COVID-19 pandemic affected firms in many sectors. Employment cuts were most severe in the retail and leisure and hospitality sectors, where most Districts reported widespread mandatory closures and steep falloffs in demand. Many Districts said severe job cuts were widespread, including the manufacturing and energy sectors. Contacts in several Districts noted they were cutting employment via temporary layoffs and furloughs that they hoped to reverse once business activity resumes. The near-term outlook was for more job cuts in coming months.
emphasis added
A few excerpts from the regional reports on real estate:
Boston: Real estate activity in the region paused in March.

Atlanta: Housing activity softened, and commercial real estate decelerated.

San Francisco: The residential real estate market was mixed, but grew slightly overall.