The Federal Reserve’s Beige Book Economic Survey confirmed what many already suspected: the pace of economic recovery is slowing and it is becoming more likely that the current recovery will be “jobless”, which is bad news, especially for the real estate economy.
In regard to commercial real estate, the report noted the markets remain depressed, showing little progress since the prior survey as vacancy rates remain high and rents continue to decline. Only the Chicago and Cleveland districts reported some improvement.
Overall, lending was flat to weakening as with most districts reporting weaker business lending as borrowers respond to the weaker economic outlook.
Some good news: industry employment in New York, Washington, and Boston has surpassed its pre-recession peak. Some bad news: Chicago, Orlando, Los Angeles, and San Francisco have not.
The next chapter of the Beige Book will be released on October 20, 2010.