Increased consumer usage of credit cards (revolving credit lines), and weakening residential loan demand in the face of higher mortgage interest costs, were reported by some banks in the latest Federal Reserve informal snapshot of the economy. Overall, the agency said, the report states that loan demand was mixed over different regions of the country.
In its latest Beige Book, published Wednesday, the Fed indicated that the reports from financial institutions reflected the overall negative outlook for future economic growth among reporting bank districts. The central bank also said contacts providing information for its latest report noted “expectations for further weakening of demand over the next six to twelve months.”
The Beige Book, published eight times a year, summarizes comments received from outside the Federal Reserve System and, the Fed notes, is not a reflection of the views of Fed officials. The latest report covers the period ending Wednesday (July 13).
In other areas, the report stated:
- Economic activity expanded at a modest pace, on balance, since mid-May; however, several districts reported growing signs of a slowdown in demand, and contacts in five districts noted concerns over an increased risk of a recession.
- Consumer spending moderated as higher food and gas prices diminished households’ discretionary income.
- Due to continued low inventory levels, new auto sales remained sluggish across most districts.
- Non-financial services firms experienced stable to slightly higher demand, and some firms reported that revenues exceeded expectations.
- Housing demand weakened noticeably as growing concerns about affordability contributed to non-seasonal declines in sales, resulting in a slight increase in inventory and more moderate price appreciation.
- Commercial real estate conditions slowed.