WASHINGTON, D.C. -

According to the Federal Reserve’s latest Beige Book, vehicle sales increased in a number of districts.

Officials revealed Wednesday that gains in auto sales were reported in Philadelphia, Cleveland, Richmond, Atlanta, St. Louis and Minneapolis.

They indicated Chicago also reported gains in sales during October, but noted the pace of sales slowed in November and that dealers suspected consumers may be waiting for potential end-year deals.

As a whole, the Fed determined overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve Districts, except St. Louis, which reported a decline in economic activity.

“District reports indicated that consumer spending rose modestly during the reporting period,” officials shared. “Motor vehicle sales increased in a number of Districts, and tourism showed signs of strength. Business service activity was flat to higher since the previous report.

“Manufacturing activity expanded at a steady pace across most of the country,” they continued. “Overall bank lending increased slightly since the previous report, and home refinancing grew at a more rapid pace. Changes in credit standards and credit quality varied across districts.

“Residential real estate activity generally remained sluggish, and commercial real estate activity remained lackluster across most of the nation,” the Fed went on to report. “Single family home construction was weak and commercial construction was slow. Districts mostly reported favorable agricultural conditions. Activity in the energy and mining sectors increased since the previous report.

“Hiring was generally subdued, although some firms with open positions reported difficulty finding qualified applicants,” officials added. “Wages and salaries remained stable across districts. Overall price increases remained subdued, and some cost pressures were reported to have eased.”

The Fed broke down the reports from its contacts by each of the 12 districts, beginning with Boston.

Boston

The Fed didn’t report specific commentary about vehicle sales, but did give a broad assessment of the mixed mood in the First District.

“Most business contacts in the First District continue to report year-over-year revenue increases, but an uncertain outlook,” officials acknowledged.

“Responding retailers cite mixed results and increased optimism about 2012; manufacturing contacts, by contrast, say they are uncertain about the outlook even though most current results remain good,” they continued.

“Software and IT services companies continue to see good demand growth, while results are mixed, though mostly positive, for staffing firms,” the Fed went on to mention. “Real estate markets remain subdued. With the exception of software and IT services, contacts say their firms are doing mostly replacement hiring; some cite difficulty in filling specific skilled jobs. Cost pressures are said to be modest.”

New York

Dealers in a specific area of the Second District fared best since the last report was generated back in late October.

“Auto dealers in upstate New York report that sales were steady to stronger in October and that dealers’ service and parts departments continue to perform well,” the Fed discovered.

However, consumer confidence in the district weakened noticeably since the last report.

Both Siena College’s October survey of New York State residents and the Conference Board’s survey covering the Middle Atlantic states (New York, New Jersey and Pennsylvania) show consumer confidence falling to its lowest level in more than a year.

Reinforcing those studies was commentary from one of the Fed’s Second District contacts.

“Financial sector conditions remain adverse with several thousand layoffs reportedly in the pipeline in the New York City area,” the Fed shared.

“This contact notes that regulatory uncertainty is hampering planning and causing shifts in resources among areas,” officials continued. “While securities firms are reducing headcounts overall, they are still hiring in the legal and compliance areas.

“A major New York City employment agency reports that the job market has held steady since the last report with hiring activity described as moderate in October. Starting salaries have remained stable over the past year,” they added.

Philadelphia

As mentioned earlier, the Fed’s contacts in the Third District indicated dealers experienced strong year-over-year sales growth. However, Thailand’s recent widespread flooding caused another supply disruption of auto parts in the district.

The Fed also touched on what might have swayed district activity most — the weather.

“Business activity in the Third District has returned to a path of slow overall growth since the previous Beige Book,” officials stated.

“Following unusual weather disruptions from an earthquake, a hurricane, and a tropical storm during late summer, the region was visited again — this time by a rare early season snowstorm,” they continued.

“The weekend storm caused widespread electric utility outages and disrupted business, but the cold weather ultimately triggered shoppers’ interest for the winter season,” officials added.

Cleveland

In the Fourth District, dealers shared plenty of details with the Fed as officials found rooftop managers described sales of both used and new vehicles as “very good.”

Expanding on the commentary, officials shared, “Auto dealers characterized new-vehicle sales during October as very good with most of our contacts reporting higher sales volume when compared to year-ago levels.

“Demand was strongest for fuel-efficient, less-expensive cars, and crossover vehicles,” thy noted. “Inventories continue to be rebuilt but remain below what dealers would like. Dealers are cautious in their outlook due to uncertainty about the economy, and the availability of vehicles that consumers want to buy.

“Demand for used cars is up substantially since the beginning of October as prices remain elevated,” the Fed also revealed. “Two dealers noted that there has been a sharp increase in manufacturers’ incentives, which they attributed to the model-year changeover. The few dealers looking to hire reported that it is difficult to find qualified candidates, especially sales representatives and service technicians.”

Like in Philadelphia, the Fed noted growth in the Fourth District expanded at a modest pace since the last Beige Book.

Richmond

Without delving into further details about the strengthening auto sector, the Fed described activity in the Fifth District as basically flat since the last Beige Book.

“Recent reports on economic activity in the Fifth District mostly described conditions as either unchanged or slightly improved,” officials learned. “The more upbeat reports came from the retail sector, which rebounded in November, and the tourism sector, which continued to post moderate improvement.

“The agricultural sector also enjoyed a good harvest,” the Fed added. “Reports on manufacturing activity indicated little change over the last month, following several months of contraction.

“Likewise, the service sector was generally characterized as being flat, although a few bright spots were noted,” officials went on to note. “Other sectors, including finance and real estate, reported generally mixed conditions. We received a wide variety of reports on the labor market, ranging from lower employment in the retail sector to several firms having trouble finding workers. Retail prices rose more rapidly than in our last report, as did service prices and commodity input prices.”

Atlanta

In the Sixth District, sales by dealers countered other retailers that watched sales become “sluggish” when compared with September’s performance.
Meanwhile, the district’s vehicle sales were described by dealers as “robust.”

Some other economic signals in the district remain mixed.

“Sixth District business contacts described the economy as expanding at a modest pace in October through mid-November,” officials reported. “Tourism activity remained a bright spot for most of the District.

“Reports from businesses suggest that hiring plans continue to be subdued and remain weighted toward hiring temporary or part-time labor,” the Fed added.

“Most businesses reported a moderation in input cost pressures, but also noted limited ability to pass on increases in commodity and other input prices from earlier in the year.”

Chicago

Vehicle sales increased in October, but the Fed determined the sales pace slowed in early November in the Seventh District.

“Dealers indicated that consumers may be waiting to see what end-of-the year deals will be offered,” officials shared.

“They also were concerned that recent stock market volatility would weigh on consumer confidence and willingness to spend,” the Fed pointed out.

The latest Beige Book also touched on how vehicle manufacturing performance slightly softened in the district.

“Manufacturers of specialty industrial metals also reported greater activity, driven in large part by the auto sector and exports,” the Fed indicated.

“Auto production in the District continued to steadily improve, although the recent flooding in Thailand was reported to have challenged supply chains and impeded the recovery of dealer inventories of Japanese vehicles,” officials acknowledged.

“Several contacts cited concerns that going forward moderately higher production levels would begin to strain capacity in the supply chain,” they went on to note. “In contrast, capacity utilization in the steel industry decreased, and orders coming into service centers were described as spotty. Furthermore, manufacturers of household appliances and construction materials reported declining demand.”

St. Louis

While the Eighth District’s overall economic performance slowed since the last report, dealers told the Fed about the upbeat conditions they’re seeing.

Dealers in the District reported that sales in September and October were up on average, compared with last year’s sales. About 46 percent of dealers surveyed saw increases in sales, while 33 percent saw decreases and 21 percent saw no changes.

Officials added 25 percent of dealers reported that new-vehicle sales had increased relative to used-vehicle sales, while 21 percent reported the opposite.

Approximately  29 percent of the Fed’s contacts reported an increase in sales of low-end vehicles relative to high-end vehicles, while 13 percent reported the opposite.

Furthermore, 33 percent of dealers surveyed reported that their inventories were too low, while 13 percent reported that their inventories were too high.

“The sales outlook through the end of the year was somewhat optimistic: 50 percent of the car dealers expect sales to increase over 2010 levels, while 25 percent expect sales to decrease and 25 percent expect sales to be similar to last year’s sales,” officials highlighted.

Minneapolis

A domestic franchised dealer told the Fed that sales in the Minneapolis-St. Paul area increased since the last report.

Elsewhere in the Ninth District, the economy grew moderately with the agriculture, mining and energy sectors leading the way, according to the Fed.

“Preliminary results of the Minneapolis Fed’s business outlook poll indicated that respondents expect slight increases in consumer spending in their communities and increased sales of their businesses’ products and services,” officials shared.

“According to the business outlook poll, 36 percent of respondents consider securing workers a challenge or serious challenge in 2012, up from 24 percent in last year’s poll,” they added.

Kansas City

In the 10th District, the Fed discovered vehicle sales remained solid with several dealers reporting high demand for midsize SUVs and fuel-efficient vehicles.

“Expectations for future auto sales were mostly positive, and auto inventories increased slightly over the previous survey,” officials learned.

A possible reason for upbeat sales expectations stem from potential employment growth in the district.

“Hiring plans were generally solid for most firms, particularly those in the energy, information technology and manufacturing sectors,” the Fed mentioned.

Dallas

In the 11th District, demand for vehicles has been steady.

“Vehicle inventories have mostly normalized from the tsunami-related shortage experienced earlier in the year, but some foreign manufactures have been recently affected by the flooding in Thailand,” officials discovered.

“The used-car market continued to be tight. Contacts expect sales to slow seasonally through year end, and then to rise moderately in 2012,” they continued.

“Price pressures were minimal across industries. Most contacts said prices were stable or down, although prices for new cars rose slightly and staffing and legal services firms noted modest increases in billing rates,” the Fed went on to mention.

San Francisco

Like in other districts, restocked inventory aided vehicle sales in the 12th District.

“Sales of new automobiles continued to strengthen, with replenished inventories for some Japanese brands supporting sales gains in response to growing consumer demand,” the Fed revealed.

“For the upcoming holiday retail season, contacts generally expect sales to match or slightly exceed the levels reached during last year’s season,” officials continued.

“Economic activity in the 12th District continued to grow at a moderate pace during the reporting period of October through mid-November,” they went on to share. “Price increases for final goods and services were limited, and upward pressures on wages were subdued overall. Sales of retail items rose further, and demand grew modestly for business and consumer services. District manufacturing activity edged up on balance.”