California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

The Federal Reserve released it latest edition of its Beige Book providing little
if any new enlightening information. The report basically identified that higher
prices for energy, food and other things are pinching people and businesses.

The Fed's report on business conditions around the nation provided fresh evidence
of the toll that housing, credit and financial problems are taking on the economy
as a whole.

The report identified "economic activity has been slow" in most of the Fed's 12
regions. Businesses described the climate as "weak" or "soft" or "subdued."

The Fed's report noted that consumers -- major shapers of the economy -- were
cautious. Shoppers "concentrated on necessary items and retrenchment in discretionary
spending."  In addition, the Fed regions of Chicago, Dallas and San Francisco, for instance,
reported noticeable declines in spending on clothing, electronics and jewelry. Sales of
furniture and household appliances were weak in most parts of the country -- victims of
the housing slump.

On the inflation front, many businesses and consumers felt the sting of high prices for food,
energy and other things, the Fed reported. The recent drop in oil prices from a record-high
of $147.27 in mid-July does give the Fed more leeway to keep its key rate steady. Oil prices
closed at $109.35 barrel on Wednesday. And, while businesses welcomed this drop, they
told the Fed that prices still remain elevated. "Business contacts in a number of (Fed) districts
indicated that they had increased selling prices in response to the high costs" for certain
commodities.

I am Tim Johnson and this has been the California Business Minute.