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Carbon starvation following a decade of experimental drought consumes old reserves in Pinus edulis.
WASHINGTON, Nov. 15 (TNSres) -- The U.S. Department of Energy's Pacific Northwest National Laboratory issued the following abstract of a journal article:
Shifts in the age or turnover time of non-structural carbohydrates (NSC) may underlie changes in tree growth under long-term increases in drought stress associated with climate change. But NSC responses to drought are challenging to quantify, due in part to large NSC stores in trees and subsequently long response times of NSC to climate variation. We measured NSC age (?14C) along with a suite of ecophysiological metrics in Pinus edulis trees
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WASHINGTON, Nov. 15 (TNSres) -- The U.S. Department of Energy's Pacific Northwest National Laboratory issued the following abstract of a journal article:
Shifts in the age or turnover time of non-structural carbohydrates (NSC) may underlie changes in tree growth under long-term increases in drought stress associated with climate change. But NSC responses to drought are challenging to quantify, due in part to large NSC stores in trees and subsequently long response times of NSC to climate variation. We measured NSC age (?14C) along with a suite of ecophysiological metrics in Pinus edulis treesexperiencing either extreme short-term drought (-90% ambient precipitation plot, 2020-2021) or a decade of severe drought (-45% plot, 2010-2021). We tested the hypothesis that carbon starvation--consumption exceeding synthesis and storage--increases the age of sapwood NSC. One year of extreme drought had no impact on NSC pool size or age, despite significant reductions in pre-dawn water potential, photosynthetic rates/capacity, and twig and needle growth. In contrast, long-term drought halved the age of the sapwood NSC pool, coupled with reductions in sapwood starch concentrations (-75%), basal area increment (-39%), and bole respiration rates (-28%). Our results suggest carbon starvation takes time, as tree carbon reserves appear resilient to extreme disturbance in the short-term. However, after a decade of drought, trees apparently consumed old stored NSC to support metabolism.
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Original text here: https://www.pnnl.gov/publications/carbon-starvation-following-decade-experimental-drought-consumes-old-reserves-pinus
The Directional Unit Hydrograph Method: Connecting Streamflow Response to Storm Dynamics
WASHINGTON, Nov. 9 (TNSres) -- The U.S. Department of Energy's Pacific Northwest National Laboratory issued the following abstract of a journal article:
Storm direction and storm velocity play a critical role in streamflow response; and despite evidence of ongoing changes in storm tracks around the world, there is no practical approach to efficiently assess and quantify the role of these storm properties in streamflow magnitude. We address this technical gap by introducing the Directional Unit Hydrograph (Directional-UH) model to systematically evaluate the storm hydrograph as a function of storm
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WASHINGTON, Nov. 9 (TNSres) -- The U.S. Department of Energy's Pacific Northwest National Laboratory issued the following abstract of a journal article:
Storm direction and storm velocity play a critical role in streamflow response; and despite evidence of ongoing changes in storm tracks around the world, there is no practical approach to efficiently assess and quantify the role of these storm properties in streamflow magnitude. We address this technical gap by introducing the Directional Unit Hydrograph (Directional-UH) model to systematically evaluate the storm hydrograph as a function of stormdirection and storm velocity. The Directional-UH is based on the well-known theory of the unit hydrograph, which has served as a foundational block of multiple rainfall-runoff models for streamflow prediction.
The Directional-UH relaxes the assumption of spatial uniform rainfall prescribed in the original concept of the unit hydrograph, by incorporating storm direction and storm velocity into the unit hydrograph function. The storm structure within the Directional-UH is represented by rectangular storms moving with constant velocity over a linear trajectory. We demonstrated, based on observations of extreme rainfall events, that rectangular storm representations can reproduce streamflow responses similar to those expected from actual radar rainfall observations. The Turkey River basin located in Iowa, USA, is used as a testbed to illustrate three practical applications of the Directional-UH model. First, the storm trajectory that produces the highest peak flow response is identified. Second, the conditions that lead to the rainfall-runoff resonance are determined, which occurs when the storm motion and the flood wave are in sync to maximize the peak flow response.
Third, streamflow responses from consecutive storm events are quantified, allowing exploration and identification of critical combinations of storm events that exacerbate the magnitude of flood events. Overall, the simple hydrological inference offered by the Directional-UH makes this model a unique and essential hydrological tool that provides new perspectives to expand our understanding of rainfall-runoff dynamics through the lenses of storm direction and storm velocity.
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Original text here: https://www.pnnl.gov/publications/directional-unit-hydrograph-method-connecting-streamflow-response-storm-dynamics
State Dept. Issues Readout of Secretary Blinken Call With Israeli Minister Gantz
WASHINGTON, April 22 -- The U.S. State Department issued the following readout by spokesperson Matthew Miller on Secretary Antony J. Blinken's call on April 21, 2024, with Israeli Minister Benny Gantz:
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Secretary of State Antony J. Blinken spoke with Israeli Minister Benny Gantz today.
The Secretary underscored the United States' commitment to Israel's security and discussed measures to increase life-saving humanitarian aid to Palestinian civilians in Gaza, the need for an immediate ceasefire that secures the release of hostages, and additional steps to minimize harm to civilians.
Secretary
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WASHINGTON, April 22 -- The U.S. State Department issued the following readout by spokesperson Matthew Miller on Secretary Antony J. Blinken's call on April 21, 2024, with Israeli Minister Benny Gantz:
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Secretary of State Antony J. Blinken spoke with Israeli Minister Benny Gantz today.
The Secretary underscored the United States' commitment to Israel's security and discussed measures to increase life-saving humanitarian aid to Palestinian civilians in Gaza, the need for an immediate ceasefire that secures the release of hostages, and additional steps to minimize harm to civilians.
SecretaryBlinken and Minister Gantz also discussed efforts to ensure the conflict in Gaza does not spread.
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Original text here: https://www.state.gov/secretary-blinkens-meeting-with-israeli-minister-gantz-3/
President Biden Issues Statement on Passover
WASHINGTON, April 22 -- President Biden issued the following statement on April 21, 2024, on Passover:
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Tomorrow night, Jews around the world will celebrate Passover, recounting their miraculous Exodus story from hundreds of years of enslavement in Egypt and their journey to freedom. This holiday reminds us of a profound and powerful truth: that even in the face of persecution, if we hold on to faith, we shall endure and overcome.
As Jews mark Passover with storytelling, songs, and rituals, they will also read from the Haggadah how, in every generation, they have been targeted by those
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WASHINGTON, April 22 -- President Biden issued the following statement on April 21, 2024, on Passover:
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Tomorrow night, Jews around the world will celebrate Passover, recounting their miraculous Exodus story from hundreds of years of enslavement in Egypt and their journey to freedom. This holiday reminds us of a profound and powerful truth: that even in the face of persecution, if we hold on to faith, we shall endure and overcome.
As Jews mark Passover with storytelling, songs, and rituals, they will also read from the Haggadah how, in every generation, they have been targeted by thosewho would seek to destroy them. This year, those words carry deeper resonance and pain in the wake of Hamas' unspeakable evil on October 7th - the deadliest day for the Jewish people since the Holocaust. More than 1,200 people were brutally massacred. Women and girls were subjected to appalling sexual violence. More than 250 innocents were taken hostage, including Americans. We can never forget the horror of Hamas' despicable atrocities.
Jews around the world are still coping with the trauma of that day and its aftermath. This Passover falls particularly hard on hostage families trying to honor the spirit of the holiday - a story centered on freedom - while their loved ones remain in captivity. Our hearts are with all the victims, survivors, families, and friends whose loved ones have been killed, taken hostage, wounded, displaced, or are in harm's way.
My commitment to the safety of the Jewish people, the security of Israel, and its right to exist as an independent Jewish state is ironclad. My Administration is working around the clock to free the hostages, and we will not rest until we bring them home. We are also working to establish an immediate and prolonged ceasefire in Gaza as a part of a deal that releases the hostages and delivers desperately needed humanitarian aid to Palestinian civilians. We will continue to work toward a two-state solution that provides equal security, prosperity, and enduring peace for Israelis and Palestinians. And we are leading international efforts to ensure Israel can defend itself against Iran and its proxies, including by directing the U.S. military to help defend Israel against Iran's unprecedented attacks last weekend.
The ancient story of persecution against Jews in the Haggadah also reminds us that we must speak out against the alarming surge of Antisemitism - in our schools, communities, and online. Silence is complicity. Even in recent days, we've seen harassment and calls for violence against Jews. This blatant Antisemitism is reprehensible and dangerous - and it has absolutely no place on college campuses, or anywhere in our country. My Administration will continue to speak out and aggressively implement the first-ever National Strategy to Counter Antisemitism, putting the full force of the federal government behind protecting the Jewish community.
This year, let us remember the central Passover theme that even in the darkest of times, the promise of God's protection will give us strength to find hope, resilience, and redemption. To all those celebrating this Festival of Freedom: Jill and I wish you a Happy Passover, Chag Sameach.
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Original text here: https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/21/statement-from-president-joe-biden-on-passover/
Federal Reserve Bank of St. Louis Issues Beige Book - April 17, 2024
WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of St. Louis issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Economic activity across the Eighth District has continued to increase slightly since our previous report. Labor market conditions were generally unchanged. Inflation pressures increased modestly, although firms continue to note higher costs are compressing profit margins as they are unable or unwilling to increase prices to customers. Reports on consumer spending indicate a modest uptick, with some contacts attributing stronger-than-expected
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WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of St. Louis issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Economic activity across the Eighth District has continued to increase slightly since our previous report. Labor market conditions were generally unchanged. Inflation pressures increased modestly, although firms continue to note higher costs are compressing profit margins as they are unable or unwilling to increase prices to customers. Reports on consumer spending indicate a modest uptick, with some contacts attributing stronger-than-expectedactivity to an earlier Easter holiday. The outlook among contacts was neutral to slightly optimistic, which is generally unchanged from our previous report, but better than one year ago.
Labor Markets
Employment has remained unchanged since our previous report. The labor market continues to be tight, particularly in rural areas and in the manufacturing and construction sectors. In contrast, banking and professional services contacts have seen upticks in applicants and less turnover from a year ago. Multiple contacts reported adjusting operating hours to reduce their overall wage bill and/or total headcount.
Wages have risen slightly since our previous report, with most contacts reporting a small increase in labor costs. In rural areas of the District, wage disparities between smaller businesses and national firms are an ongoing challenge as smaller firms are struggling to match the higher wages. For example, a food processing firm increased their labor budget by 6 percent to cover merit-based increases to prevent labor turnover. Large District employers continue to reach contract agreements with unions. A large St. Louis distributor reached a contract agreement with its union employees, and St. Louis school district employees were able to secure the largest wage increase in twenty years. However, a pilot union took steps toward a strike.
Prices
Prices have increased modestly since our previous report, as contacts are broadly feeling the pressures of increases in both labor and nonlabor costs. Small business contacts reported profit margins compressing on higher costs and an inability to raise final prices for consumers. A restaurant contact reported that even though food and labor costs have risen recently, final prices have not yet been adjusted. A textiles contact echoed this sentiment, but indicated the firm still lacks pricing power over brands and retailers; so, increases in final prices have not kept up with increases in costs. A retail contact reported that her small business insurance costs have doubled. In a similar vein, an insurance agent reported that homeowners are seeing increases in annual insurance premiums of 20 to 25 percent.
Consumer Spending
Consumer spending has risen modestly since our previous report. Restaurant and hospitality contacts have generally seen stronger-than-expected business activity, while automotive and retail contacts have generally reported that sales did not meet expectations. A District restaurant contact noted that consumer spending is increasing marginally as delivery services are boosting sales. A fast-food contact noted customers were showing preferences for specialty products, increasing dollar sales per customer. A St. Louis hotel contact reported that, while overall activity is higher relative to last month, activity in the business travel segment has fallen short of expectations. A small clothing retailer reported strong growth in sales, which they attributed to an earlier Easter holiday. A Little Rock boat retailer stated they are cutting profit margins to sell their products due to a lack of demand and plentiful inventory. A Kentucky auto dealer noted that so far this year both new and used car sales have been low. However, they're optimistic activity will increase in the later spring and summer months on expectation of lower auto loan rates.
Manufacturing
Manufacturing activity has slightly increased since our previous report. Firms in Arkansas and Missouri reported a modest increase in inventories and delivery lead times. Reports of supply chain disruptions increased slightly. One contact noted the Red Sea shipping disruptions have resulted in higher prices, and another firm noted a 2-week delay on a large equipment order due to the bridge collapse in Baltimore. A brewery contact noted that their suppliers have excess capacity and are waiving some fees to attract new business. A food manufacturer reported revenues and volumes were down in the first quarter due to smaller orders from restaurants, but private label grocery store orders remain strong.
Nonfinancial Services
Activity in the nonfinancial services sector has improved slightly since our previous report. The transportation outlook was largely unchanged. Airports across the District remain optimistic that business and leisure travel will remain strong during the remainder of the year. Smaller trucking firms reported financial challenges stemming from lower prices and volumes, which has made it harder to compete with larger firms. Across the District, healthcare contacts spoke about persistent shortages of medical supplies and drugs. An Arkansas funeral services contact reported fewer traditional funerals and more cremations. They attributed this switch to lower-cost services to a growing number of uninsured or underinsured individuals at time of death.
Real Estate and Construction
Residential real estate activity has increased at a moderate pace. Real estate contacts noted signs of an early start to the spring homebuying season. District bankers reported that mortgage loan volumes in February and March were higher than the same period last year. A renovation and remodel contact noted a strong pipeline of projects, although with some shift toward lower-cost improvements.
Commercial construction activity has been relatively unchanged. An architect in the Little Rock area reported their firm is busier than ever, with projects coming from public funds. In contrast, traditional commercial work has slowed significantly. A construction contact noted demand for transportation, municipal, and lodging projects remains high, while demand for retail and higher education construction projects has slowed. Similarly, an engineering contact noted that so far this year is shaping up to be stronger than expected and the outlook is improving.
Banking and Finance
Banking conditions have been generally unchanged since our previous report. Contacts reported little change in deposits, but the market remains competitive. Total loan growth has decreased slightly as banking contacts reported being more selective and focused on maintaining existing relationships. Commercial and industrial loans have decreased. However, the pace of consumer lending growth continues to accelerate. A large retailer noted a considerable uptick in credit card usage, and banking contacts noted customers continue to open new lines of credit. Delinquency rates remain low, but some contacts noted higher delinquencies on auto and small business loans.
Agriculture and Natural Resources
District agriculture conditions have remained unchanged since our previous report. Total acres planted as of the end of March are about the same as this time last year. However, contacts in Arkansas said they're closely watching weather over the next few weeks; if conditions remain wet, that will limit future plantings and may force producers to plant later than is ideal. The distribution of crops is expected to shift: The number of acres of corn planted decreased, especially in Arkansas and Mississippi, while plantings of cotton, rice, and soy increased. For corn and cotton, this marks a return to 2022 acreage. Several District contacts reported feeling price pressures due to higher travel costs of bringing in H2A visa labor. Contacts also noted difficulties accessing farming equipment due to high costs and delays, particularly for repairs.
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Original text here: https://www.federalreserve.gov/monetarypolicy/beigebook202404-st-louis.htm
Federal Reserve Bank of Philadelphia Issues Beige Book - April 17, 2024
WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of Philadelphia issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Business activity in the Third District was steady this period, after a slight decline last period. Employment continued to edge up, with increases in full-time nonmanufacturing jobs offsetting a modest decline in manufacturing jobs. Wage pressures and price inflation continued to moderate, to a still-modest pace for wages and to a still-slight pace for prices. Contacts reported less ability to pass on price increases. Activity in staffing
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WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of Philadelphia issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Business activity in the Third District was steady this period, after a slight decline last period. Employment continued to edge up, with increases in full-time nonmanufacturing jobs offsetting a modest decline in manufacturing jobs. Wage pressures and price inflation continued to moderate, to a still-modest pace for wages and to a still-slight pace for prices. Contacts reported less ability to pass on price increases. Activity in staffingand recruitment was constrained this period, in part because of lower demand for labor. New listings and sales of existing homes improved slightly. Housing affordability remained a concern because home price appreciation and high interest rates persisted. Lower-income households were especially burdened by the high-price, high-rate environment. Expectations for economic growth over the next six months modestly improved, rising among manufacturers and holding steady among other firms.
Labor Markets
Employment continued to edge up in March. Since our February survey, nonmanufacturing firms have reported slight increases in full-time jobs and modest decreases in part-time jobs. Firms in the smaller manufacturing sector continued to report a modest decline in employment. On average, all firms responding to the survey reported little change in the average workweek.
Activity in staffing and recruitment was muted this period, after a slight increase last period. Staffing contacts have noted less demand for labor, as firms have been choosing to maintain their current labor force. Further, some firms have been more selective in the candidates they choose to hire.
Overall, wage inflation continued at a modest pace, and firms reported less competitive wage pressures. Among nonmanufacturers, the distribution of reported changes in wage and benefit costs per employee was similar to the distribution in the years before the pandemic. Most firms reported no change, 38 percent reported increases, and 3 percent reported decreases. Our contacts, including several manufacturers, reported that wage pressures continue to moderate across industries and that wage increases are now in the range of 3 to 5 percent.
Prices
On balance, inflation continued at a slight pace. In our March survey, the prices received index for nonmanufacturers rose to a level near its long-run average--associated with a period of modest increases. Over the prior two months, relatively few firms reported increases, and those increases were slight. The prices paid index remained near its long-run average. Some contacts reported being unable to pass on increasing input prices, as customers have become more price sensitive.
The prices paid and prices received indexes for manufacturing firms remained below their long-run averages. The manufacturers' prices paid index declined to its lowest reading since May 2020, while the prices received index declined slightly.
However, manufacturers continued to expect prices to increase. The future prices received index rose above its long-run average, while the future prices paid index remained near its average.
Manufacturing
Overall, manufacturing activity increased modestly during the period, after a slight decline in the prior period. The indexes for new orders and shipments were positive, at levels somewhat below their nonrecession averages.
Expectations among manufacturers for growth in the next six months were much more widespread in March. Nearly 60 percent of the firms expected increases in new orders and in shipments.
Consumer Spending
On balance, retailers (nonauto) continued to report slight declines in real sales. Despite consistent foot traffic, customers are trading down and purchasing cheaper products during store visits to offset price increases.
Auto dealers reported slightly higher sales of new cars in the current period and continued strong consumer demand. According to contacts, although the industry's patterns of production, inventory, and sales have nearly normalized following the pandemic, the emerging growth of all-electric vehicles has further disrupted the sector. Affordability continues to be a concern, with high prices and high interest rates, despite promotions from dealers and manufacturers.
Tourism continued to slow slightly from the strong recovery in recent years. Contacts reported having less pricing power and lower demand, despite offering more promotions. Leisure travel continued to fall from high levels, despite a minor uptick in March due to spring break. The recovery continued in business travel.
Nonfinancial Services
On balance, nonmanufacturing activity declined slightly, following slight growth in the prior two periods. The sales/revenues index fell to a near-zero reading, from a modest increase, while the index for new orders remained slightly negative. A building equipment contractor reported that customers are deferring projects and ordering minimum quantities because of tighter budgets.
Current sentiment of firms appeared to deteriorate again. The firms' perceptions of general activity for the region fell further into negative territory in March, and the index of general activity at the firm level turned slightly negative. In contrast to manufacturers, expectations among nonmanufacturing firms for their own growth in the next six months changed little and remained well below historical averages.
Financial Services
The volume of bank lending (excluding credit cards) continued to grow slightly during the period (not seasonally adjusted), unchanged from the last period and down from the moderate pace of one year ago.
District banks reported moderate growth in commercial real estate lending and modest growth in home mortgages. Volumes of home equity lines held steady, as did consumer lending (other than auto and credit cards). Auto lending edged lower, and commercial and industrial lending fell moderately. Credit card volumes continued to fall back--this time slightly, after significant seasonal declines last period.
Banks and business clients continued to report stringent lending criteria, which have hampered some business plans. Banking contacts continued to report good credit quality, and delinquencies remained low. However, contacts from many sectors noted that lower-income households are struggling with high prices and high interest rates. Contacts reported upticks in repossessions and delinquencies on auto loans, especially for low-income households.
Real Estate and Construction
Brokers reported that existing-home sales edged up slightly but remained at historically low levels. The inventory of for-sale properties improved slightly through February; however, contacts were uncertain whether listings would continue to rise through the spring buying season. Meanwhile, it remains a seller's market, with sales prices continuing to climb. Contacts continued to report multiple offers, cash sales, buyers paying above the asking price, and homes selling quickly, as evidenced by reduced time on the market.
New-home builders continued to report steady sales. Builders noted that the ongoing pent-up demand for housing and the historically low inventory of existing homes for sale continued to bolster market demand for new construction. Some builders are constructing more speculative houses--confident that the pent-up market demand will spur buyers when their houses are completed.
In nonresidential markets, leasing activity and transaction volumes continued to decline slightly, especially in the office subsector, where investors are waiting for discounts on distressed properties.
Nonresidential construction activity slowed slightly in the current period. One contractor noted some softening in the construction trades recently, and another noted that construction bidding is significantly lower. Many contacts noted that projects have been deferred in anticipation of lower interest rates. Some firms continued to be busy, despite lower backlogs, and have noticed some growth in the planning and engineering phases of public infrastructure projects.
For more information about District economic conditions visit: https://www.philadelphiafed.org/regional-economy.
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Original text here: https://www.federalreserve.gov/monetarypolicy/beigebook202404-philadelphia.htm
Federal Reserve Bank of Chicago Issues Beige Book - April 17, 2024
WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of Chicago issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Economic activity in the Seventh District increased slightly overall in late February and March, and contacts generally expected a similar rate of increase over the next year. Employment increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw no change in activity; and manufacturing and construction and real estate activity were flat. Prices and wages rose moderately, while financial conditions were stable.
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WASHINGTON, April 22 (TNSres) -- The Federal Reserve Bank of Chicago issued the following Beige Book on April 17, 2024:
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Summary of Economic Activity
Economic activity in the Seventh District increased slightly overall in late February and March, and contacts generally expected a similar rate of increase over the next year. Employment increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw no change in activity; and manufacturing and construction and real estate activity were flat. Prices and wages rose moderately, while financial conditions were stable.Prospects for 2024 farm income were unchanged, with expectations continuing to be for income to fall below 2023 levels.
Labor Markets
Employment increased modestly over the reporting period and contacts expected a similar rate of increase over the next 12 months. Contacts noted a small rise in hours per worker on balance, with cuts in manufacturing offset by higher workweeks in other sectors. Contacts across sectors indicated labor market conditions continued to cool. Several noted higher numbers of job applications per posting and improved applicant quality. Wages and the cost of benefits both increased moderately. Several contacts noted that wage pressures had eased some.
Prices
Prices rose moderately overall in late February and March and contacts expected a similar rate of increase over the next 12 months. Producer prices moved up moderately. Nonlabor input costs continued to rise, with contacts noting higher prices for raw materials and energy. Shipping costs were up on net: While ground freight rates moved down, one contact said ocean freight charges were up some after the collapse of the Francis Scott Key Bridge in Baltimore. Several manufacturers indicated that raising prices had become more difficult in recent months and that their margins had shrunk. Consumer prices were up moderately overall.
Consumer Spending
Consumer spending increased slightly over the reporting period. Nonauto retail spending was up a bit, with contacts noting greater sales of laptops and big screen TVs as well as a rise in window and door installations. One contact cautioned, however, that the increase in sales in March could be related to an early Easter rather than growth in underlying demand. Spending on discretionary items was down, while spending at discount stores and membership clubs was up. Leisure and hospitality activity dipped, most notably at hotels, tourist attractions, and airlines. Vehicle sales rose in recent weeks, with larger growth in new cars and light trucks than in the used vehicle market. Consumers gravitated further toward more affordable models, particularly compact and subcompact crossover and sport utility vehicles.
Business Spending
Business spending increased slightly in late February and March. Capital expenditures ticked up with contacts noting purchases of software. One contact said that his firm had substantially cut costs by switching from an external provider of marketing materials to generating materials using AI with no impact on sales. Demand for truck transportation services decreased slightly, contributing to a decline in ground freight rates. Inventories for consumer goods were somewhat elevated. Auto dealers reported higher-than-desired inventories of new vehicles, but lower-than-desired inventories of used vehicles. Manufacturing stocks were slightly above comfortable levels. There were few reports of input shortages, though some contacts noted shortages of electrical components, and a heavy machinery contact said some inputs were in short supply because of reduced shipping volumes through the Suez Canal.
Construction and Real Estate
Construction and real estate activity was little changed on balance over the reporting period. Residential construction activity was flat. Residential real estate activity increased slightly overall, with growth concentrated in the starter and luxury segments. In Iowa, multiple contacts indicated that the pace of new home sales was notably slower than last year. Home inventories remained low, and prices and rents were up slightly. Realtors continued to hear from prospective buyers that affordability is their top concern. Nonresidential construction activity increased slightly, as some projects were still moving ahead despite high building and financing costs, notably for healthcare facilities and retail renovations. One contact said that quoting for potential new projects was at a healthy level. Commercial real estate activity was unchanged, as were prices and rents. Activity in the office segment was very limited, and contacts noted buyers and sellers were struggling to agree on valuations. In other segments, contacts said asking prices had come down by even more than offer prices, leading to more deals going through. Contacts noted that for the financing of deals to work, buyers were often having to put down large amounts of equity.
Manufacturing
Manufacturing demand was flat on balance in late February and March. Both auto and heavy truck sales were unchanged, and heavy truck contacts expected little or no growth over the next 12 months. Machinery sales were down modestly, with contacts highlighting slower demand for agricultural equipment. Demand for steel was flat on balance. Activity in fabricated metals was also steady, with higher demand from defense offset by lower demand from aerospace.
Banking and Finance
Overall, financial conditions were unchanged in late February and March. Bond market values increased slightly, equity markets rose modestly, and volatility edged down. Business loan demand declined modestly. One contact noted that small trucking companies were struggling because of a slowdown in demand and high debt loads following recent fleet expansions. Business loan rates were slightly higher, terms tightened some, and loan quality was unchanged. Consumer loan demand decreased on balance, with one contact noting a slowdown in auto lending. However, there was also a report of higher credit card usage. Consumer rates rose slightly, terms tightened a bit, and quality edged down.
Agriculture
Prospects for 2024 farm income were little changed overall for crop and livestock producers with contacts continuing to expect incomes in 2024 to fall below 2023 levels. Field work in preparation for planting was well ahead of the usual pace given warmer-than-usual temperatures. Precipitation across the District improved water levels, though some areas remained in drought. Corn and soybean prices increased slightly amid expectations that farmers would plant fewer of these crops than earlier anticipated. Wheat prices were generally lower. Egg prices fell, most dairy prices were down, and hog prices were higher. Cattle prices rose despite a decline toward the end of the period after news of an avian flu outbreak in cattle raised concerns that beef demand would weaken.
Community Conditions
Community, nonprofit, and small business contacts saw little change in economic activity over the reporting period. State government officials reported a slight decrease in sales tax revenues compared with a year ago. Small business intermediaries, including Community Development Finance Institutions, noted increased loan demand and said clients continued to mention that challenges in finding workers were holding back growth. Social service organizations, philanthropies, and municipal leaders said that the end of COVID-era federal government financial support would soon result in budget gaps for state and local governments. For low-income consumers, elevated price levels, particularly housing costs, remained a challenge for household budgets. Efforts to increase the supply of affordable housing continued to run up against high costs for materials and labor.
For more information about District economic conditions visit: https://chicagofed.org/cfsec.
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Original text here: https://www.federalreserve.gov/monetarypolicy/beigebook202404-chicago.htm
