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Economically Speaking, Its Beige

What is the Beige Book [1] and why is it Beige? Prior to 1970 it was red [2] and not intended for public reporting. Perhaps the color was not considered neutral enough for economic reporting – beige seems to be about as neutral as you can get. In 1983, the Beige Book became a public report.

More digging to do on the latter, but here’s the latest…well, not exactly hot off the pressesĀ¦Federal Reserve: Beige Book–New York–July 27, 2005 [3]

Basically, economic expansion is now more moderate than earlier this year, including retail sales and labor costs [4] and productivity [5]. It is interesting that one of the items that has kept mortgage rates (long term rates) in check for so long has been the fact that productivity has outpaced economic growth. As a result, large corporations have been more likely to refrain from hiring new employees. The limited growth in employment has kept long term rates in check as investors are less concerned about the threat of inflation.

Construction and real estate were robust across the region, but the rate of price increases has slowed. This doesn’t mean prices are falling, it means that the rate of appreciation is slowing.