Feds ( RAINBOW ) Beige book

• Manufacturing increased in most districts
• Consumer spending increased modestly in most districts.
• Labor market conditions continue to strengthen
• Credit conditions improved in most districts.
• Lending environment, competitive, margins, compressed.
• Low prices weighed on energy and mining outputs
• Business spending, real estate activity expanded.
• Retailers generally optimistic about Outlook for 2016
• Wages gained in every district except Atlanta. Several reported signs of pickup in wage growth
• consumer spending increased modestly in most districts; auto sales strong in several districts.
• Difficulty filling certain low and high skilled jobs in several districts.
• Activity and healthcare sector grew at solid pace in a number of districts
• Districts reporting on inventories indicated they were generally in line with sales.
• Capital spending increased in most districts with scattered reports of capital spending for capacity expansion

What is interesting from the report is it talks about inventories in line with sales.  This morning we saw weaker retail sales. We also saw lower inventories but also saw sales even lower. The inventory to sales ratio is at 1.41 which is the highest level since the Great Recession days.   Capital goods orders ex defense and air fell by -2.5% last month. Granted they were up 3.3% in January but were down -3.5% in December.  This report suggests an increase for March I would guess.   Auto sales were strong?  Not according to the last sales numbers.