Beige Book Report Summary

In its Beige Book report, compiled by the Boston Fed and released minutes ago, the Fed stated that the U.S. economy grew slightly from late May to early July. However, the overall economic outlook was assessed as neutral to slightly pessimistic.

Key Findings

• Economic Activity: Only two of the Fed’s 12 districts anticipate an increase in economic activity, while the rest expect levels to either remain stable or weaken.

• Prices: Price increases continued nationally. Seven regions reported moderate increases, while five indicated a more modest pace of growth, consistent with previous Beige Book findings.

• Business Uncertainty: High business uncertainty has led to continued caution among firms.

• Consumer Spending: Non-automotive consumer spending decreased in most regions; car sales fell slightly due to tariffs. The tourism sector showed mixed results.

• Manufacturing & Services: Manufacturing weakened slightly while non-financial services performed consistently but with mixed results.

• Loans & Construction: Loan amounts increased slightly across most regions. However, the construction sector saw a slowdown due to rising costs, with residential and non-residential sales remaining generally flat.

• Agriculture & Energy: The agricultural sector remained weak, while the energy sector experienced a slight decline.

• Labor Market: There was slight overall growth in the labor market. Employment growth varied across regions, with some areas experiencing moderate growth and others seeing slight declines. Companies increased investment in automation and AI to mitigate labor needs, with wage increases ranging from modest to flat. Layoffs were limited and mostly confined to manufacturing sectors.

This is not investment advice.