Uncertainty around the presidential election impacted auto sales, retail, housing market activity and healthcare, according to the Federal Reserve’s final Beige Book of the year. The report includes anecdotal evidence on the health of the US economy from 12 regional Fed districts.
The bulk of the observations came from the Cleveland district, which said on jobs that:
Staffing firms reported that the number of job openings and placements declined, a situation they attributed to jitters about the presidential election.
And on residential construction:
Homebuilders and real estate agents reported that the presidential election dampened housing market activity over the period. However, they believe the slowing is temporary. One builder pointed to an increase in his finished-home prices as a factor for weakening demand.
They added that several builders, including nonresidential contractors commented on uncertainty citing ” the regulatory environment, presidential election jitters, and, to a lesser extent, a potential rise in interest rates”.
Retail contacts in the district also cited the election among a string of other issues that weighed on sales.
Retailers cited the unusually warm autumn weather, uncertainty surrounding the presidential election, and stiff competition from Internet retail options as factors contributing to transaction declines. With the presidential election behind them and the holiday shopping season approaching, retailers are looking for sales to improve.
In the Richmond and St Louis districts election jitters impacted consumer purchases of durable goods.
Auto sales declined, which a couple of dealers attributed to election-related uncertainty. Retail prices increased at a slightly slower pace than the mild rise previously reported.
Meanwhile, autodealers in St Louis “reported a slowdown in sales, which some attributed to the uncertainty caused by the presidential election”.
Finally, contacts in the San Francisco district pointed to uncertainties surrounding Obamacare, which president elect Donald Trump had promised to repeal during his campaign.
Contacts reported that demand for health-care services remained strong, but the election outcome had greatly increased uncertainty around the Affordable Care Act and raised concerns about the possibility of slower industry growth and cutbacks in the near term.
The Fed also noted some changes to the Beige Book starting in 2017. Going forward, the national summary, along with each District report, will cover three core topics: overall economic activity, employment and wages, and prices. Though each district will continue to highlight other industry specific issues.
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