Financial Update (Second Quarter 2007)

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The Beige Book: The Fed's Window on the National Economy

About two weeks before each of the Federal Reserve's Federal Open Market Committee (FOMC) meetings, news media eagerly await the central bank's Summary of Commentary of Current Economic Conditions. Once the report is released, news outlets carry thousands of articles about economic conditions throughout the nation.

If the public is not familiar with the Summary of Commentary of Current Economic Conditions, it is familiar with the more common name for the report: the Beige Book. The name refers to the color of the cover of the report.

What's in the Beige Book?
Each Beige Book has 13 sections. The first section provides a national economic overview that addresses key areas of the U.S. economy, including consumer spending, manufacturing and other business activity, real estate and construction, banking and finance, agriculture, natural resources industries, labor markets, wages, and prices. Following the national overview are 12 summaries of economic conditions of the Reserve Bank districts, in which each Reserve Bank provides insight on similar topics. These topics vary according to the designated special focus of each region.

"The Beige Book: Timely Information on the Regional Economy" pdf document
Summary of Beige Book reports off-site image

The section devoted to the Sixth Federal Reserve District—the Atlanta Fed's region—examines consumer spending, tourism and business travel, real estate, manufacturing and transportation, banking and finance, employment and prices, agriculture and natural resources, labor markets, wages, and prices throughout the Southeast.

Gathering the comments
The information in the Beige Book compiles reports gathered from the Reserve Bank head office and branch directors as well as interviews with key business contacts, economists, market experts, and other sources. Every six to eight weeks, Reserve Bank analysts and economists gather the comments and conduct the interviews to prepare their regional district summary.

When compiled, the comments are presented anonymously so that none of the businesses can be identified. Making comments in the report anonymous ensures that business representatives and other participants are comfortable providing candid insight into their industry without concern about competitors acquiring proprietary information.

The national overview summarizes the 12 district reports. The task of compiling this overview rotates between Reserve Banks.

Who uses the Beige Book and how?
The FOMC uses the Beige Book as part of its deliberations on the national economy. Timely anecdotal information gleaned from the Beige Book can help shape monetary policy discussions because many of the economic models and indicators are based on data that are several months old. As such, the Beige Book is a vital analytical tool with valuable insights that are snapshots of current national economic conditions.

June 6, 2007