SAN FRANCISCO (Sept. 8, 2016) — The election year, the Zika virus and even the legalization of marijuana were cited as mitigating factors in the August economic outlook, according to the Beige Book issued Sept. 7 by the Federal Reserve Bank of San Francisco.
Contacts in several of the 12 Federal Reserve districts expressed only modest expectations for real estate sales and construction activity, “due in part to economic uncertainty surrounding the November elections,” the document said.
Meanwhile, sources in the Atlanta district noted fewer international arrivals than during previous reporting periods because of the impact of the Zika virus, the report said.
Also, in the San Francisco district, banks reported higher operational costs because of the regulatory constraints surrounding the legal marijuana industry in that area, the report said.
Generally speaking, economic growth was modest during August, and most contacts said they expected moderate economic growth in the near future, the Beige Book said.
Consumer spending was little changed in most districts, and tourism was flat from the previous report, the report said. Energy-related products and services performed weakly, and auto sales declined somewhat, it said.
Labor market conditions remained tight in most districts, though workers with specific skill sets reported more rapid gains, according to the report. Upward wage pressures were moderate on balance, and price increases were slight overall, it said.
The Beige Book is issued several times a year, and is edited in turn by a different Federal Reserve district. Each document summarizes comments received from businesses and other contacts outside the Federal Reserve System.