“Food pantry managers were seeing an ongoing rise in food prices and increased demand from clients.”Federal Reserve Bank of New York
“Inquiries regarding rent and food assistance picked up, and contacts noted high inflation was straining household budgets.”Federal Reserve Bank of Dallas
These were just some of the insights shared in new sections of The Beige Book: Summary of Commentary of Current Economic Conditions by Federal Reserve District. Introduced this fall, the additional sections highlight economic conditions in low- and moderate-income (LMI) communities. The Beige Book, as the publication is more commonly known, is a collection of outlooks from each of the 12 Reserve Banks that is published eight times per year. The Beige Book summarizes economic developments in each Reserve Bank’s region through the anecdotes from contacts, and highlights themes that policymakers and the public are likely attuned to. The publication covers a variety of perspectives on economic matters that Federal Reserve decisionmakers use as inputs into their monetary policy decisions.
While the Beige Book has often included anecdotes about conditions affecting LMI communities, the insights are largely from the perspective of businesses. In September, Beige Book added sections on “Community Conditions” and “Community Perspectives” among some Reserve Banks’ summaries, which further amplify the voices of nonprofit and community leaders and workforce professionals who serve lower-income people.
Perspectives from the Tenth Federal Reserve District
In September for example, the Kansas City Fed’s entry focused on affordable housing, noting that contacts reported rents and evictions were increasing across the Bank’s region, while high housing prices—combined with interest rate increases—pushed LMI homebuyers out of the market.
It is important to note that the Kansas City Fed does not try to present a full picture of LMI conditions in a single Community Conditions entry. Instead, the Bank highlights the economic theme with the greatest impact on its LMI households at that point in time. For each publication, the Bank will shift its focus as economic conditions change.
Perspectives from the Fourth Federal Reserve District
The Cleveland Fed sources its Community Conditions entry primarily from contacts working in and on behalf of lower-income communities. The section doesn’t only communicate broad trends across the Bank’s region. It also makes use of the valuable insights that community development stakeholders provide. Its September entry noted increased stays at shelters and higher demand for food assistance because of rising prices.
Of course, quantitative data can reveal these issues, but community contacts are often aware of trends before the data is available.
Community contacts are also helpful for revealing slight, more nuanced fluctuations in the economy. For example, while job availability remains historically high, the October entry pointed out that fewer nonprofit leaders saw the number of jobs increase this fall than they did this spring.
The value of a broader lens
Leading indicators—that is, signals about what’s to come in the economy—can come from a variety of directions, places, and people. The housing crisis made this clear, as subprime lending spread through lower-income communities first. COVID-19 reinforced the sentiment, as many lower-wage workers were the first affected, but often the last to reintegrate back into the workforce. The information we hear from our communities—through surveys, advisory councils, outreach, and more—is valuable in shaping effective and efficient policies and programs that are responsive to current needs.
We are excited to share these insights in new and different ways and broaden the lens through which we view the economy.