Fed Reserve Cites Modest Growth in Midwest Economy
The Upper Midwest's economy “grew modestly” during the past two months, according to the Federal Reserve Board's Beige Book report, which was released Wednesday.
The board's report on the ninth district-which comprises Minnesota and other Midwestern states-cited growth in consumer spending, tourism, residential construction, services, manufacturing, energy, mining, and agriculture.
Wage increases in the Upper Midwest were “moderate,” and prices “increased modestly,” according to the report.
Minneapolis retailers and local malls saw increased sales in July. According to one Minnesota auto dealer who was surveyed for the report, August sales were up from a year ago, but corporate customers have recently been “more cautious” when buying vehicles.
The Federal Reserve described summer tourism in the ninth district as “solid,” largely due to an increase in revenue at Minnesota resorts.
Construction in the commercial real estate sector remained sluggish, while residential construction continued its “mild recovery,” according to the report.
Labor markets “strengthened slightly” after 25 consecutive months of year-over-year employment decreases in Minnesota and Wisconsin.
Despite the recent economic growth, the Federal Reserve said that overall labor market conditions remained weak.
The report pointed to layoffs by major employers, including the recently announced plans by Children's Hospitals and Clinics of Minnesota to eliminate up to 250 positions by mid-November. Two Minnesota state universities have also recently announced significant layoffs.
The Federal Reserve's ninth district includes Minnesota, North and South Dakota, Montana, northwestern Wisconsin, and Michigan's Upper Peninsula. The Beige Book report is published eight times annually.