The Federal Reserve released its Beige Book on regional economic activity. The report, which is published eight times a year, was compiled by the Federal Reserve Bank of St. Louis based on information collected on or before July 19, 2010.

The Fed reported that economic activity has continued to increase, on balance, since the previous survey, although some districts noted that economic activity generally held steady. Two districts, Atlanta and Chicago, said that the pace of economic activity had slowed recently.

Most districts reporting on credit standards continued to note that lending standards remain restrictive. New York reported tighter credit standards for all categories except consumer loans, while Kansas City reported tighter commercial lending standards.

Reports on credit quality were mixed in Cleveland and Kansas City, while quality was stable in San Francisco. Credit quality improved slightly in Philadelphia, Richmond, and Chicago. In the Dallas district, non-performing loans have stabilized and are not expected to worsen. Meanwhile, Philadelphia, Cleveland, and Richmond continued to report delinquencies above historic norms. Delinquency rates in the New York district decreased for consumer loans but experienced little or no change in other categories.

Banking conditions varied across the districts, with some districts noting soft or decreased overall loan demand; credit standards remained tight in most reporting districts. Banking activity in Richmond and loan demand in Kansas City increased modestly. Overall loan demand was reported as soft or weak in Cleveland, Atlanta, and Dallas, while total outstanding loan volume decreased in recent months in St. Louis but was steady in Philadelphia and San Francisco.

Demand for commercial loans was flat to increasing in the Philadelphia, Cleveland, Richmond, Chicago and Kansas City districts; in contrast, St. Louis reported a decrease in commercial loans outstanding, while New York, Atlanta and San Francisco reported restrained or decreasing demand in this lending category.

Demand for consumer loans was weak in Cleveland and eased in Philadelphia; Atlanta and St. Louis indicated a decline in consumer lending; but demand for consumer loans increased in New York and Kansas City.

With regard to other categories, manufacturing activity continued to expand in most districts and districts also noted improved conditions in the services sector.

The five districts reporting on transportation noted increased activity. Transportation activity improved in the Cleveland, Atlanta, Kansas City, Dallas and Philadelphia Fed regional districts. Freight transport leaders in the Cleveland district reported that volume continued to improve, though the profit gains were only moderate.

Most districts that reported on auto sales noted declines in recent weeks. Activity in residential real estate markets was sluggish in most districts after the expiration of the April 30 deadline for the homebuyer tax credit.

Click here to access the Beige Book from the Federal Reserve.