The Federal Reserve’s latest Beige Book, published on Wednesday, reported little to no change in economic activity since the previous month. The labor market saw an easing of tightness across the nation, with improvements in hiring and retention. However, recruiting and hiring skilled tradespeople remained a challenge.
Consumer spending was observed to be mixed, with general retailers and auto dealers experiencing variations due to differences in prices and product offerings. Consumer travel slowed slightly, but business travel increased. Some firms for which the holiday shopping season is important had varied expectations, suggesting confusion about the real state of the consumer.
The report also noted that banking contacts reported declines in loan demand, while consumer credit quality was described as stable or healthy. Some bankers were on a “loan diet.” Real estate conditions remained unchanged with a low inventory of homes for sale, and affordable housing challenges were noted.
Manufacturing activity showed positive signs with improving outlooks, despite concerns over the UAW strike. Prices continued to increase at a modest pace overall, with input cost increases slowing or stabilizing for manufacturers but rising for services sector firms.
The near-term economic outlook was generally described as stable or having slightly weaker growth. Inflation mentions were the fewest since Jan 2022, while recession mentions tumbled by more than half compared to the previous month. Higher long-term interest rates weakened economic outlooks for several districts.
Regional economic activities varied across Federal Reserve Districts, with Boston seeing slight expansion in business activity and employment, while New York experienced a modest weakening of regional economic activity. The report noted the price of oil nearing 2023 highs and turmoil in the Middle-East. Wage growth remained modest to moderate across most districts.
In comparison, the Federal Reserve Bank of St. Louis’ Beige Book highlighted similar economic conditions since September 2023, with fluctuations in consumer spending due to pricing strategies in retail and auto sectors. The tourism industry displayed growth, but consumer travel decelerated, offset by a rise in business travel in select districts. The short-term economic forecast suggested stability or slight weakness, with firms reliant on holiday sales having varied projections.
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