SYLVIE DOUGLIS, BYLINE: NPR.
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ROBERT SMITH, HOST:
Wailin, I know this is a little unusual, but I wanted to show you a series of inkblots, a Rorschach test if you will, about the economy.
WAILIN WONG, HOST:
Oh, boy. I'm ready.
SMITH: OK. What do you see in this inkblot?
WONG: Let me see. I see an outstretched hand. So I'm going to say this is the hand of the market, the invisible hand of the market.
SMITH: Very interesting. What about this one?
WONG: I want to squint a little bit. This one, I think I see the supply and demand curve.
SMITH: All right. One more.
WONG: Oh, this one I know. That is the Beige Book from the Federal Reserve.
SMITH: Yes, it is the Beige Book - that obscure collection of economic anecdotes published eight times a year by the Federal Reserve. But peer closer. Can you see if the economy is getting better or worse?
WONG: I see that some of the Federal Reserve districts say economic activity is growing.
SMITH: And yet in other parts of the country, the economy is softening.
WONG: I guess in the Beige Book this time around, you can see whatever your subconscious wants you to see about the economy.
SMITH: Well, you know what I see? It's the Beigie Awards. And I'm your host, Robert Smith.
WONG: And I'm Wailin Wong. Every time the Federal Reserve publishes the Beige Book report, we study it carefully, finding the best stories, the funniest lines, the most telling data points.
SMITH: And we give out awards and hopefully peer into this inkblot of an economy and figure out - is it a butterfly or is it more of a monster?
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SMITH: I always like to remind people that the Beige Book is set up for competition. There are 12 regional Federal Reserve banks. They all write a couple of pages in the book about their district, and we choose the best anecdotes.
WONG: Yeah, let's do it. The second runner-up in this book is the Boston Fed. They said on balance, manufacturing firms reported stronger sales. And I'll let you read from the book, Robert.
SMITH: Quote, "the only firm to report weaker sales, a veterinary care supplier, explained that veterinary clinics were cutting their hours to relieve overworked staff."
WONG: Oh, man. I'm picturing lines of people, like, carrying their pets outside the clinic. And the vets are saying, no, no, we haven't slept in days. You have to go away.
SMITH: This is super interesting to me because the last time we did the Beigie Awards, there was an entry about the boom in pet insurance. And I have this theory that all those pets are the ones that people bought during the pandemic, and they're suddenly getting older. They need shots and procedures. And we are now entering a pet bubble.
WONG: It sounds adorable but also very dangerous. And I will say THE INDICATOR is working on a story about this right now. So stay tuned.
SMITH: Love it. OK. Our first runner-up for the Beigies is the Minneapolis Fed. And I should explain that most of the Beige Book is very formal, very buttoned up. So seeing this bit of slang caught our attention.
WONG: That's right. The Minneapolis Fed quoted someone as saying, distilleries, wineries and restaurants are banging right now.
SMITH: Banging is defined by the Urban Dictionary as, quote, "when something, someone is extremely good, tasty, hot or sexy - banging." I searched the Federal Reserve site, and I couldn't find another use of banging to describe economic conditions ever, so respect to them.
WONG: Is this the first time anyone's gone from reading the Beige Book to then opening up Urban Dictionary on another browser tab?
SMITH: I think that is also unprecedented.
WONG: Well, that brings us to another big moment. We're now going to unveil the winner of the Beigie Award for September. So I'll open the envelope.
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WONG: And the Beigie goes to the Dallas Fed.
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SMITH: This is the first Beigie for the Dallas Fed. The award is being accepted by senior business economist Emily Kerr.
EMILY KERR: Thank you. We're happy to be here.
SMITH: Have you been waiting for this a long time?
KERR: You know, I think we've been runner-up a couple of times, so we're proud to be at the top of the podium this time.
WONG: We decided to give the Beigie to Dallas because they had the funniest line and perhaps one of the saddest lines.
SMITH: We'll start with the joke, of course. Your Beige Book entry noted that manufacturers were having trouble hiring people, and one person quipped the labor pool was more like a labor puddle.
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KERR: That's right.
SMITH: OK. I'm not saying you put that in there just to win the award, but did you put it in there just to win the award?
KERR: You know, you don't want to be second place for too long. Eventually, you've got to move your way to the top and do what it takes to get there. So I was happy to put a joke in this time.
WONG: So, Emily, we also picked the Dallas Fed for a more serious section. You wrote about the effects of a severe drought on cattle ranchers. Normally, cattle graze on grasses and drink from ponds, but extremely dry conditions mean that there isn't enough grass and water out there. And some ranchers are having to reduce the size of the herd by slaughtering cows.
KERR: Yeah. So we've been amid this really terrible drought in Texas, and it's been statewide. Two-thirds of the state was in severe drought, even extreme drought over a lot of the summer. And those dry pasture lands and dried up ponds as a result of that drought just put a tremendous strain on these ranchers and livestock producers. And as a result, they just weren't able to feed their herds and ultimately had to move them on to slaughter before they normally would.
SMITH: I know that the cattle eventually would be slaughtered. Is this a difficult economic decision for them to make, to have to do it early?
KERR: It is because you want them to get bigger. You know, you feed them on your grass for longer, and that gets them at these heavier weights. And you're able to get a higher price for them.
WONG: The drought isn't just affecting Texas. Essentially, half of the country is dealing with drought. And we wanted to talk to a rancher out there about the conditions and the hard choices they're making. So we managed to reach Delane Atcitty in his car, where he spends most of his time driving around the West.
DELANE ATCITTY: I'm a road warrior. I - you know, it's good to look at the rangeland and the country and what your neighbors are doing and people in the next states are doing.
SMITH: Delane lives in New Mexico and is a member of the Taos, Pueblo and Navajo Tribes. He used to have 45 head of cattle. And over the last two years, he lost his source of water and had to reduce the herd to 20. Delane says they've been talking about dry conditions for, oh, more than 20 years. But it's been getting slowly worse, sort of like...
ATCITTY: ...You know, somebody gradually turning up the oven, and, you know, you don't feel the difference because it's going up gradually. Now, you know, it's starting to intensify, especially with the - you know, the lack of cover on the rangeland.
SMITH: And that means that there's not as many plants. I mean, you look out there, and there's nothing for the cattle to eat?
ATCITTY: Yeah. In some places, it's like that. It's almost like a flat piece of paper.
WONG: Delane says he's glad he made the decision to reduce his herd early, but a lot of his neighbors are facing this decision now. It costs a fortune to truck in water and feed if the land gets too dry, and there is an emotional component to reducing your herd.
ATCITTY: You know, it ties into who you are and the legacy of your family. It really hits home when you have to make decisions like that. There's quite a few ranchers that - a lot of them struggle every day just to make ends meet. You know, for us natives, you know, we've been raising cattle since the Spaniards, you know, have been here. And so we're learning how to adapt like anything else.
SMITH: That includes finding more drought resistant cattle. Delane runs the Indian Nation's Conservation Alliance, and he's trying to get native ranchers to work together to share and conserve lands and hopefully launch a brand of Native American owned and managed beef.
WONG: And we see this all over the Beige Book this time. These are unprecedented times, both in terms of the climate and economically. And people are improvising and trying the best they can to adapt.
SMITH: Emily Kerr of the Dallas Fed, thank you for bringing this situation to our attention. And congratulations on your very first Beigie award.
KERR: Yeah. Well, thank you so much. And just thanks to the team here that makes it happen and just to all of our contacts across the district that give us the information that we need to be able to consolidate and then push it out to the public.
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SMITH: Oh, and that music can mean only one thing - that is it for this September's Beigie Awards.
WONG: This episode of THE INDICATOR was produced by Corey Bridges with engineering from Robert Rodriguez. Our senior producer Viet Le did the fact-checking. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
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