WASHINGTON — Economic conditions and consumer spending across the U.S. strengthened modestly for most regions in the country in the six weeks through the end of November, but retailers continued to tightly manage inventory and staffing levels leading up to the holiday season, according to the Federal Reserve’s Beige Book report released Wednesday.
Reports based on anecdotal evidence from across the country indicated sales were up slightly or mixed for most regions. Atlanta, Cleveland, Kansas City, New York, Philadelphia, Richmond and San Francisco all reported an uptick in sales, while retailers in Boston, Chicago, Dallas and Minneapolis said sales were mixed.
“The latest Beige Book corroborates our view that real growth is losing some momentum at the end of 2009 and in early 2010. Businesses are playing the recovery on the conservative side,” said Brian Bethune, chief U.S. financial economist with IHS Global Insight.
The Fed said reports from its districts “noted that retailers were holding leaner inventories this holiday season, though some indicate that retailers have recently become more optimistic about the holiday season outlook.”
Sales of clothing and entertainment merchandise in Chicago picked up. Shoppers at both ends of the spectrum in Dallas started purchasing more discretionary items. Value retailers in the district said sales of apparel, housewares and televisions improved. High-end consumers opened their wallets more in recent weeks in Dallas as well, but most consumers in the region remained price-conscious.
Retailers in San Francisco noted while consumers were still focused on necessities and trading down to lower price points, spending on nonessential items was “firmer.” Discount chains and traditional department stores in San Francisco reported improved sales.
Common retailer observations in Philadelphia included “the consumer is focused on basics” and “consumers want good value,” according to the report. Consumers in Cleveland continued to focus on necessary purchases over discretionary ones and were price sensitive.
Wall Street had a mixed reaction to the Fed report and the rest of the day’s economic data. While the S&P Retail Index moved up 2.96 points, or 0.7 percent, to 412.41, the Dow Jones Industrial Average slipped 18.90 points, or 0.2 percent, to 10,452.68. Overseas markets firmed, led by a 0.8 percent rise in Hong Kong’s Hang Seng Index to 22,289.57. Tokyo’s Nikkei 225 was up 0.4 percent to 9,608.94 while, in Europe, the CAC 40 in Paris rose 0.5 percent to 3,795.92 and London’s FTSE 100 posted a 0.3 percent gain to 5,327.39.