Economic conditions in the Federal Reserve district that includes North Carolina weakened in October and early November, as retail sales and a weak housing market dragged down modest gains in other sectors.
That's according to the Fed's latest Beige Book report, which compiles anecdotal evidence of how the local economy is doing. The report for the 5th District, headquartered in Richmond, Va., compiles data from the District of Columbia, Maryland, Virginia, the Carolinas and most of West Virginia.
The Fed said district retailers were nervous about the holiday season. Sales of big-ticket items including automobiles slumped in the last six weeks, and big-box retailers rolled out holiday discounts in anticipation of weak seasonal revenue.
Residential real estate also got weaker - bad news on top of already tough conditions in an area that had resisted the national housing slump for months. Housing inventories swelled, and an agent in Greensboro told the Fed that both the price and condition of properties had to be "just right" in order to sell.
Home mortgage lending slowed, the Beige Book says, singling out Raleigh as an area where that occurred. Contacts in the Carolinas also told the Fed that commercial mortgage demand has weakened in recent weeks, though other parts of the Fed district saw slight increases.
The area's strong commercial real estate market also took a hit, with office properties seeing less activity, according to the Fed. Retail and industrial leasing were "generally upbeat."
There was also good news in the Fed's report. A weaker dollar prompted manufacturers to boost production to export more goods. Service firms bolstered revenue. Tourism was also up from last year, Outer Banks contacts told the Fed, and Raleigh's temporary-job market was thriving thanks to the area's low unemployment figures.
Agriculture was slow in the period thanks to the ongoing drought.
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