Fed’s Beige Book: Inflation pressures broaden as growth, hiring flat

The Fed’s Beige Book released Wednesday indicated that the U.S. economy has largely stalled, with “little change” in overall activity since the previous report. Out of the 12 regional districts, three reported slight to modest growth, five showed no change, and four signaled mild softening. While some respondents expressed cautious optimism for an uptick in demand within 6–12 months, others highlighted that persistent uncertainty and the government shutdown are weighing on business confidence and investment decisions.

Price pressures remain a key theme. The report said input costs rose at a “faster pace,” citing “tariff-induced” increases alongside higher expenses for insurance, healthcare, and technology services. While some of these cost increases have been passed on to consumers, competitive pressures are limiting full price transmission.

Labor market conditions showed no significant change, with employment levels “largely stable” and labor demand “generally muted”. Wage growth continued at a “modest to moderate pace”, but firms reported sharper increases in employer-sponsored healthcare costs, which have contributed to higher overall labor expenses.

Full Fed’s Beige Book report here.