California Business Minute™

Hi, I am Tim Johnson and this is the California Business Minute.

The Federal Reserve released it first of eight annual reports, a snap shot
on the economy entitled the Beige Book. 

The report illustrated that the US economy is seeing a broader improvement
in activity even if conditions are still sluggish. The report illustrated
modest improvement in key areas such as consumer spending, manufacturing
and housing. The data "indicated that while economic activity remains at
a low level, conditions have improved modestly further, and those improvements
are broader geographically than from the last report.

The report illustrate that consumer spending in the holiday season "was slightly
greater than in 2008, but still far below 2007 levels." Auto sales held steady
or increased slightly in most of the twelve Federal Reserve Bank regions.
Manufacturing activity "has increased or held steady since the last report in
most districts," it added. Home sales increased in most areas, especially for
lower-priced homes, with price little changed. Construction activity for new
homes "remained at low levels" in much of the country, the report indicated.
Additionally, the Fed cited "soft" conditions in commercial real estate that
are pressuring rents and leading to higher vacancy rates. And in the financial
sector, loan demand "continued to decline or remained weak" in many areas.

As for the critical labor market, the Fed cited "some hiring" in a few parts of
the nation but said "labor market conditions remained generally weak with modest
wage increases appearing in just a few districts."

"Labor market conditions remained soft in most Federal Reserve districts, because
of the high level of unemployment. The Beige Book identified that wage pressures
were "subdued" and overall inflationary pressures modest.

The jobless rate held at 10 percent in December while 85,000 jobs were cut,
highlighting the slow pace of recovery from the deepest recession in decades.

The US economy expanded at a 2.2 percent pace in the third quarter of 2009, the
latest for which official data is available. The Fed and most economists expect
data to show continued growth in the fourth quarter and into 2010 but worry that
high unemployment will curb consumer confidence and spending.

I am Tim Johnson and this has been the California Business Minute.