Fed’s Beige Book signals steady jobs, moderating price pressures

The latest Beige Book from the Fed showed US economic activity improving modestly, with eight of twelve Districts reporting growth at a “slight to modest pace”. Three Districts saw no change and one reported a modest decline, marking a better backdrop than recent cycles where stagnation dominated.

Consumer spending firmed modestly, supported by the holiday shopping season, while business activity presented a mixed picture. Manufacturing remained uneven, with five Districts reporting growth and six citing contraction.

Labor market conditions were “mostly unchanged”. Eight Districts reported flat hiring, though multiple contacts noted increased use of temporary workers as firms seek flexibility amid uncertainty. Wage growth continued at a “moderate pace”, with several businesses saying wage pressures have normalized.

Price pressures remained elevated, rising at a moderate pace across most Districts. Tariff-related cost increases were a common theme, and while firms expect “some moderation in price growth ahead”, many anticipate prices will stay high as they pass through accumulated cost increases.

Full Fed’s Beige Book here.