The Fed Beige Book showed that U.S. economic activity increased modestly since early July, while employment rose only very slightly and businesses continued to report elevated input costs.
According to the Federal Reserve’s national summary, 10 of the 12 Federal Reserve districts reported growth ranging from slight to moderate, while two reported no change. The information was collected on or before August 24 and published on September 2.
Consumer spending increased slightly overall, with reports showing greater price sensitivity alongside continued demand for higher-end purchases. Auto sales remained subdued as weaker confidence, high fuel prices and rising financing costs weighed on demand. Manufacturing activity strengthened across most districts, supported in part by defense and data-center orders.
Fed Beige Book Highlights Labor and Price Pressures
Employment increased very slightly, with three districts reporting modest gains, four recording slight gains and five seeing no change. Demand for skilled trades and technical workers remained firm, while retail and hospitality contacts reported weaker labor demand. Wage growth was generally described as modest to moderate.
Prices rose moderately in eight districts. Businesses cited higher costs for energy, transportation, metals and petrochemicals, while manufacturers and retailers continued to report tariff-related pressure. Some consumer-facing firms said customers’ sensitivity to higher prices limited their ability to pass costs through.
The Fed Beige Book said the general outlook remained positive, although sentiment varied by sector. Contacts continued to identify energy prices, government policy and international conflict as major sources of uncertainty. The report summarizes comments from businesses and other district contacts and does not represent a formal policy assessment by Federal Reserve officials.
