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"The pace of economic activity in the Memphis zone slowed during the first quarter of 2008. Except for the manufacturing sector, in which contacts reported increased activity, reports in most other sectors were not so favorable. Retail and car sales reports for January and February 2008 were mostly negative. In contrast with recent trends there were signs of weakening in the services sector. Residential home sales continued to weaken, while reports in the commercial real estate market were more upbeat. Banking conditions during the third quarter of 2007 were mixed."
--Overview of the Memphis economy as reported in the March 2008 inaugural edition of the Burgundy Book.
Most followers of the Federal Reserve and national economic trends are familiar with the Summary of Commentary on Current Economic Conditions--commonly known as the Beige Book. This report on current economic conditions in each of the twelve Federal Reserve districts is published eight times a year in conjunction with meetings of the Federal Open Market Committee, the Federal Reserve body responsible for monetary policy decisions. However, instead of focusing the report's contents on raw data, each Federal Reserve Bank gathers anecdotal information on current economic conditions in its district through interviews with key executives, economists, and market participants. All of this information is then summarized for the Beige Book by sector and district. Because the book provides data about all twelve districts, the summary for each district remains relatively limited.
Given our extensive list of business contacts at the Federal Reserve System, each Reserve Bank has a wealth of information regarding economic conditions in its particular region--more than each can include in its section of the Beige Book. As a result, the Federal Reserve Bank of St. Louis decided to publish reports on local trends for each of its four offices in Memphis, St. Louis, Little Rock, and Louisville. This summary of local trends, which is published quarterly, is called the Burgundy Book--Current Economic Conditions in the Eighth Federal Reserve District. The first two reports focusing on economic conditions in the Memphis zone are available on the website (http://research.stlouisfed.org/regecon/district.html).
The authors of the document are economists who are a part of the St. Louis Fed's Center for Regional Economics--8th District (CRE8[R]), which is headed by Howard Wall, Vice President and Regional Economics Advisor. Two of CRE8[R]'s economists, Research Officer Michael Pakko and Senior Economist Ruben Hernandez-Murillo, focus their efforts on economic conditions in our District's Mid-South. Data provided cover twenty-one counties in western Tennessee, twelve counties in eastern Arkansas, and thirty-nine counties in northern Mississippi.
Each issue of the Burgundy Book is divided into two sections: anecdotal information and government-provided data. This first section of the report summarizes information provided by various contacts within the St. Louis District and roughly covers the time period of the two previous Beige Books. The second section includes timely government-provided data for the metro areas and states of the Memphis zone.
"These new, quarterly reports will provide a more detailed focus on the regional economies in our District;' says Pakko. "Anecdotal information will offer a perspective that is not available anywhere else, and the data section will bring together information from various sources in one convenient place. We hope that the Burgundy Book will be a valuable source to business and community leaders in the Eighth District and help enhance the role of our branch offices within their local communities"
One strength often attributed to the Beige Book is that it contains forward-looking comments, not simply remarks that have already been published. The same can be said for the Burgundy Book. As Ruben Hernandez-Murillo states, "The forward-looking anecdotal information contained in this report may provide a useful insight not only about the current state of the Memphis economy but also about future economic conditions."
Key areas discussed in the Burgundy Book for the Memphis Zone are consumer spending, manufacturing and other business activity, real estate and construction, banking and finance, and agriculture and natural resources. When necessary, additional timely categories will be included. During the inaugural publication on March 18, 2008, the Burgundy Book includes data on foreclosures because of its timely and important nature.
The value of this report lies mostly in the candid assessment it provides. A large portion of this information comes from members of the boards of directors from the Fed's head office and branches. Because of the sensitive nature of the information, "it is important for everyone to understand that the information provided to the Fed is not reported by source, so as to protect the confidentiality of the person providing the data," says Nick Clark, president of the Memphis Branch board of directors and partner of Clark & Clark. "Knowing this, Fed contacts are more willing to provide honest assessments of what is happening in their particular industry."
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Economist Howard Wall echoes Nick Clark's views and says, "In our experience, information on local economic conditions is sometimes scattered and irregularly reported. One of our goals with this new report is to give businesses and consumers the kind of information they need to make better economic decisions for their organizations and themselves"
"As the local face of the St. Louis Fed, I am often asked about the current economic state of the Memphis Zone. Now, rather than trying to capsulate key information in one or two sentences, I can point to a detailed summary that is very beneficial to banking, business and educational leaders as well as others with an interest."
The Burgundy Book is available only on the Federal Reserve Bank of St. Louis' website. Anyone can go to the website and sign up for e-mail notifications of when a new book is about to be published. For 2008, publication dates were March 18, June 25, September 17, and December 17.
CRE8
Center for Regional Economics--8th District
About CRE8[R]
CRE8[R] provides economic analysis of policy issues on a local, state, and national level. CRE8[R] also organizes policy forums, conferences, and other events that highlight the latest economic research.
About the Federal Reserve Bank of St. Louis
With branches in Memphis, Little Rock, and Louisville, the Federal Reserve Bank of St. Louis serves the Eighth Federal Reserve District, which includes western Tennessee, all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, and northern Mississippi. The St. Louis Fed is one of twelve regional Reserve Banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation's central bank, the Federal Reserve System formulates U.S. monetary policy, regulates state-chartered member banks and bank holding companies, provides payment services to financial institutions and the U.S. government, and promotes community development and financial education.
by Martha Perine Beard, Senior Branch Executive, Federal Reserve Bank of St. Louis--Memphis Zone
Martha Perine Beard is Senior Branch Executive of the Memphis! office of the Federal Reserve Bank of St. Louis. The Memphis region includes western Tennessee, northern Mississippi, and eastern Arkansas. Mrs. Beard received her Master's Degree in Economics from Washington University in St. Louis, Missouri. She is very active in a number of civic organizations in the Mid-South. She became head of the Memphis Branch in 1997 after serving in an official capacity in several areas at the St. Louis Reserve Bank.
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