The NYT and other publications reporting on the Fed's release of the latest Beige Book noted that the district banks reported that growth was slowing. It would have been helpful to remind readers that the district banks were also reporting slow growth through the middle of the last recession. Below is the lead paragraph from Beige Book released in August of 2001, 5 months after the recession had begun: Reports from most Federal Reserve Districts point to slow growth or lateral movement in economic activity in June and July. Retail sales generally were sluggish and frequently below expectations, despite substantial discounting on a wide range of consumer goods. Manufacturing activity in nearly all sectors and regions declined further in recent months as producers adjusted to weak domestic and foreign demand and worked through accumulated inventories. Sustained weakness in the manufacturing sector spilled over to other businesses, with many Districts indicating declines in demand for office space and trucking and shipping services. In contrast, residential real estate markets remained stable and even expanded in some areas, with the relative strength of the sector attributed in part to lower mortgage interest rates. Agricultural producers continued to struggle against low prices, weak exports, higher energy costs, and the weather, although some regions reported improvement in growing conditions since the last survey period. Financial institutions across the country reported reduced demand for a wide variety of loans, tighter credit standards, and stable-to-deteriorating quality of existing loans and leases; residential mortgages were the notable exception to these trends. The point is that economists and people in policy positions have a tendency not to recognize or acknowledge recessions.
--Dean Baker