12th District - San Francisco

Regional Federal Reserve Banks

The reports suggest that the Twelfth District economy experienced little or no growth during the survey period of June through early July. Upward price pressures remained severe for food and energy-intensive items but were moderate otherwise, and wage pressures eased further…. Manufacturing activity expanded on net, while sales remained strong for agricultural items and most natural resource products. Housing markets showed no signs of recovery from their prolonged slump, and demand for commercial real estate continued to weaken. Contacts from financial institutions indicated that loan demand and credit quality fell slightly on net. View full report.

Wages and Prices

Price inflation was moderate for most items, although increases in food and energy prices continued to put upward pressure on overall inflation…. Prices continued to increase for many commodities and raw materials, such as steel, aluminum, and titanium, and rising fuel prices have resulted in larger and more widespread fuel surcharges among providers of transportation services.

The reduction in wage pressures was widespread but was particularly pronounced in sectors that have seen the largest drops in labor demand, such as construction, finance, real estate, and retail.

Real Estate and Construction

Conditions weakened further on the nonresidential side, with contacts noting a steep reduction in the total value of commercial construction permits in San Diego and an ongoing reduction in rental demand for commercial real estate in San Francisco.