Fed’s Beige Book finds muted reaction to Republican tax plan

• January 17, 2018
• realestatelife
• Announcements, Business & Markets, Real Estate, Real Estate Finance

The Federal Reserve said the pace of growth continues to be “modest to moderate” in its latest snapshot of the economy known as the Beige Book.

The report covers late November to Jan. 8.
Most districts reported “on-going labor market tightness and challenges finding qualified workers across skills and sectors,” the report said. The lack of workers was constraining growth in some instances. Despite this, wages increased at a modest pace as did prices.

The outlook for 2018 “remains optimistic for a majority of contacts across the country,” the survey found. Some retailers said holiday sales were higher than expected. The real estate sector seemed to have stalled. Residential real estate was described as “constrained” while non-residential activity saw slight growth. Manufacturers reported modest growth and only some were increasing capital expenditures. There were scattered reports of firms raising wages and prices the report did not identify any broad trend. Only in Chicago and Dallas were there reports of business excitement over the Republican tax plan. Districts along the East Coast were worried about higher taxes on consumers from the new limits on deductions for mortgage interest and property and state income taxes. Asked about consumer spending, an auto dealer in the Philadelphia district felt that “people with cash on hand ran to the municipal tax office to prepay property taxes, not buy cars.”