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THE LATEST ANALYTICS Economy Expanded 'Modestly' in September According to the Fed's Beige Book, the nation's economic recovery is continuing at a steady, if slow, pace. T September, the Federal Reserve said in its most recent Beige Book report. The report, the last Beige Book he nation's economy "generally expanded modestly" from mid- August until the end of to be issued prior to Election Day, painted a mixed regional picture, with a "leveling off" of eco- nomic activity in New York and a "slowing in the pace of growth" in Kansas City. Meanwhile, the remaining 10 Federal Reserve districts reported that "growth continued at a modest pace." The Beige Book is prepared by and San Francisco reported stronger loan demand on bal- ance, while Kansas City and Dallas reported flat demand and Chicago reported somewhat weaker demand." Most districts, the book said, "reported an increase in mort- gage lending, especially for refinancing purposes." Demand for consumer credit, particularly for auto loans, was reported as "strong in the Cleveland, Atlanta, St. Louis, Dallas, and San Francisco districts, while consumer loan demand was more limited in New York, Richmond, Chicago, and Kansas City." Credit standards, the report the Federal Reserve eight times a year, issued about two weeks be- fore each meeting of the Federal Open Market Committee. The Beige Book, which is com- piled on the basis of anecdotal rather than statistical evidence, is closely watched on its release, though not usually cited in the minutes of the Federal Open Market Committee meeting for which it is prepared. Consumer spending, which represents about 70 percent of the economy, "was generally reported to be flat to up slightly since the last report, to be a bright spot amid an otherwise pedestrian report. The book noted "all 12 districts reported that existing home sales strengthened, in some cases sub- stantially," since the last report. "Most districts reported Residential real estate proved strengthening in existing home sales, while prices were de- scribed as steady to increas- ing, with declining inventories noted in the Boston, Atlanta, Minneapolis, Dallas, and San Francisco districts," the report went on to say. " according to the book. were steady or rising" Boston, Atlanta, Minneapolis, Dallas, and San Francisco "noted declining or tight inventories" putting up- ward pressure on prices, track- ing both the Federal Housing Finance Agency and Case Shiller Home Price Index reports. "Modest price increases were The report said "selling prices reported in the New York, Richmond, Chicago, and Kansas City districts. New York and Richmond reported relatively strong demand at the high and low ends of the market," accord- ing to the Beige Book, "whereas Philadelphia and Kansas City noted relative strength for mid- range homes." "New home construction and sales," the report said, "were more mixed but still mostly im- proved" with the report noting "increased construction and/or new home sales" in the Atlanta, Chicago, St. Louis, Kansas City, Dallas, and San Francisco dis- tricts. Multifamily construction, in particular, was described as robust in the Boston, New York, Atlanta, Chicago, and Dallas districts. Residential rental markets "continued to be characterized as strong, even in the New York and Atlanta districts, where rents increased somewhat less strongly than in recent months," the report said. Commercial real estate mar- ficult to obtain for many small businesses in the Cleveland, Richmond, and Chicago districts," though "Philadelphia, Cleveland, Dallas, and San Francisco dis- tricts reported stiff competition among lenders." Loan quality, the Beige Book said, "improved in Philadelphia, Kansas City, and Dallas," and "delinquency rates generally held steady or declined in the New York, Cleveland, and Dallas districts." The Beige Book was prepared kets were described as mixed. Office markets, the Beige Book said, "showed signs of soften- ing in the northeastern dis- tricts: Boston, New York, and Philadelphia." New York, the re- port noted, has "substantial new supply coming on the market in early 2013." Atlanta, Minneapolis, and San Francisco noted "some improvement," the Beige Book reported, while "most other districts reported stable or mixed market conditions." Overall loan demand increased slightly since the last report, the Beige Book said. "New York, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, said, "were little changed since the last report. However, New York noted some tightening for consumer loans and residential mortgages, while Richmond and Chicago reported some easing for commercial and industrial loans." Loans were described as "dif- before the Employment Situation report—which showed an improve- ment in the national unemploy- ment rate in September—and found employment conditions were "little changed since the last report." The New York and Chicago dis- tricts, the report said, "noted weaker labor market conditions, and condi- tions were described as mixed in Richmond" while companies "in the St. Louis district reported an increase in hiring plans. said, "continued to report that employers were having difficulty filling highly skilled positions," and "in response, a few districts noted that firms were starting to increase training programs to meet their staffing needs." "Several districts," the report " THE M REPORT | 59 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET