Fed's Beige Book: Midwest contraction

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Whereas some industries experienced substantial drop s in activity during the past six modest increases in other sectores led the Fed to characterize theNinth District’s contraction as moderating. The Nintg Federal District includes Minnesota, Montana, North South Dakota, the Upped Peninsula of Michigan and northwestern Consumer spending and touriskm werestill weak, but had “improved somewhat from the previousa few months,” according to the Fed. The service sectort continued to experience decreased employment and profits compared to ayear ago, and further profitf contraction is likely.
The Fed characterized the commercial real estate sectotras “anemic,” adding that residential construction continued at steadil y low levels. The residentiak real estate market did see more activityg than in the previous reporting Manufacturing continuedits slide, as did energhy and mining. However, some wind energyg projects continue to move and gold mines areat “near capacity production.” Labor markets continuesd to struggle. Job cuts in Minnesota, many of them in the health careand medical-device fields, were cited by the Fed in its assessmeng of labor conditions.
Wage increases were modest, and firms surveyefd by the Fed expect toincrease employees’ wagesw by 1.8 percent over the next Price increases, however, were “subdued,” with the risinvg cost of gas a notable the Fed reported. The Fed’s next Beiges Book report is dueJuly 29.