Beige Book shows some positive economic activity

Businesses were optimistic that demand will rise in coming months. Consumer spending was generally stable, though many businesses noted increased sensitivity to prices and quality among customers.

Energy activity in the oil and gas sector, a key player for the steel sector, was flat. But demand for electricity generation continued to grow at a robust rate. Electricity demand was driven by rapid expansions in data centers, an important factor for steel demand, and was reportedly planned to be met by investments in renewable generation capacity in coming years, the Beige Book stated.

The Beige Book is a summary of economic conditions across the Fed’s 12 districts. You can read the full report for a deeper dive into the most recent data, which was collected before Nov. 22.

Here’s a look at some key districts:

Philadelphia

Business activity edged up after falling slightly during the last period, in the district that covers Delaware, southern New Jersey, and eastern and central Pennsylvania.

Consumer spending was flat overall, but the broader nonmanufacturing sector climbed, while manufacturers reported modest growth. Employment, wages, and prices all rose modestly, but inflation expectations rose over concerns about potential tariffs. On average, firms expect moderate economic growth over the next six months, the report found.

Cleveland

Business activity grew modestly in recent weeks, and respondents expected activity to tick up in the coming months. Demand for business services remained robust in the district covering Ohio and parts of Pennsylvania, West Virginia, and Kentucky.

Nonresidential construction activity increased modestly, the Fed found. Employment levels grew slightly. Overall, businesses said wages, nonlabor input costs, and prices grew.

Chicago

Economic activity increased slightly in the region covering Iowa and most of Illinois, Indiana, Michigan, and Wisconsin.

Consumer and business spending edged up; employment was up slightly; construction and real estate activity was flat; and manufacturing activity decreased modestly. Financial conditions loosened slightly.

Dallas

Economic activity rose moderately over the reporting period in the region covering Texas, northern Louisiana, and southern New Mexico. Growth resumed in manufacturing and retail. Employment increased, and wages ticked up. Outlooks improved, with widespread increases in demand expectations.

“Interest rate cuts have had an overall positive but mild effect, and contacts were mostly bullish on prospective business conditions under the incoming administration, though some noted worry about potential trade and immigration policy changes,” the Beige Book stated.

San Francisco

Economic activity was stable in the district covering Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington. Employment levels were flat while wages and prices rose slightly. Activity in manufacturing, residential real estate, and financial services increased somewhat, while conditions in commercial real estate were stable. Conditions in agriculture softened slightly.