The Federal Reserve recently released its "Beige Book" report, a collection of observations and reports from around the nation, which included comments from the 12th District board of governors down in San Francisco about the state of the western economy.

In general, our economy is flat, the Fed says.

Wage increases are low - except for "engineers and other highly skilled technical workers in selected manufacturing industries, such as aerospace, and in computer and software services."

Inflation is "modest" - until you factor in soaring food and fuel costs.

Manufacturing is a mixed bag, with some sectors (aerospace) reporting gains while others (forest products) contract.

Likewise, agricultural prices are high, but that is "partly offset by cost increases arising from higher prices for grain, fertilizer, and petroleum-based inputs in general." The Fed also warned there are signs of a southern California water shortage that could reduce spring plantings and fruit production.

Retail sales in general are soft, but there were gains reported for discount stores and "a surprising degree of strength for luxury goods." On the other hand, car sales - a huge chunk of the retail economy - suffered a "collapse" in March.

Service sector demand also was mixed, with steady gains in health care offset by sharp contractions in sectors related to real estate (like finance and insurance).

Software sales are down, as is spending on technology in general.

Residential real estate markets continue to spiral down in California, Nevada and Arizona, and prices in the last remaining pockets of strength - Utah and the Pacific Northwest - "have flattened or begun to fall."

Finally, banks in the region have severely tightened lending restrictions, the Fed said, making it harder for borrowers. There's been an increase in mortgage refinancing, but very little new mortgage lending. Commercial and industrial lending is mixed across the region, and tending down.

So what does it mean for Washington's CEOs?

Rising wages for skilled aerospace and technology workers should help sustain retail sales in general around Puget Sound, and since Boeing and Microsoft continue to have to import workers to fill those jobs, that means at least some continued population growth. A continued influx of high-wage workers can only be good for the slowing housing industry.

Layoffs in forest products are bad news in rural communities, particularly those in southwest Washington still trying to recover from last winter's floods.

A water shortage in California - if that comes to pass - will be good news for Washington fruit growers; shoppers who can't buy oranges will instead buy apples. Likewise, it'll increase demand for Washington vegetables. That should be welcome news to retailers in Yakima and the Tri-Cities.