Beige Book: Regional market growth remains mostly flat

The typical jobs and consumer price index reports produced by the federal government were delayed due to the US government shutdown, causing the Fed to rely more heavily on qualitative data. 

Overall, electric vehicle (EV) sales led to meager consumer spending growth during the six-week period. With federal EV incentive programs expiring, consumers showed greater urgency to complete purchases. Middle- and lower-income households continued to feel what some have called “the middle-class recession.”

Luxury travel spending remained strong, while international travel spending in the US weakened. 

Manufacturing, energy, agriculture, and transportation industries reported mostly lower activity. 

Real estate and construction activities were mixed. 

The most common challenges cited in the report included changes to immigration policy, which affected the hospitality, construction, and agriculture sectors. Tariff expenses were also noted as a challenge to input costs and a deterrent to consumer spending. 

Regions reporting economic growth 

Boston 
Consumer spending grew, while employment and home sales remained flat. Prices ticked up, hiring and layoffs increased slightly, and some cost pressures became more acute. The market outlook ranged from neutral to cautiously optimistic. 

Philadelphia 
Employment levels, wages, and activity in manufacturing and non-manufacturing sectors increased modestly. Wages returned to pre-pandemic levels. Firms reported expectations for moderate growth over the next six months. 

Richmond 
Consumer spending and import activity both grew modestly. Manufacturing activity decreased, while price growth in manufacturing and overall price levels were moderate. Most industries experienced flat growth compared with the previous period, and employment growth remained steady.

Regions reporting softening markets 

Kansas City 
Despite softer activity during the latest reporting period, the Tenth District maintained a positive outlook. Activity and employment both decreased, and consumer loan portfolios deteriorated moderately. Banking and business operations remained steady. Firms expect stronger sales, employment growth, and faster price increases in 2026 compared with 2025. 

Minneapolis 
The district reported softening labor demand from both firms and job seekers but noted moderate wage growth. Input prices increased, while other prices remained slightly elevated. China’s decision to end soybean purchases was a concern among agricultural producers. Manufacturing and commercial real estate stayed flat, while all other sectors contracted. 

New York 
Overall activity decreased slightly, though several factors were positive. The region reported steady employment, modest wage gains, steady and slightly elevated manufacturing activity, and increased consumer spending among middle- and upper-income households. Prices rose, and business expectations remained low for the months ahead. 

San Francisco 
Decreased activity in the retail trade, agriculture, and real estate sectors caused overall economic activity to decline. Employment levels fell slightly. Commercial real estate activity, manufacturing, and lending remained stable. Prices rose modestly, and business and consumer services activity was mixed. 

Regions reporting no change 

Atlanta 
The Sixth District reported steady employment levels and some wage growth. However, consumer spending fell, leisure travel softened, home sales decreased, prices increased modestly, and transportation activity declined. These factors offset a stable real estate market and gains in the energy and agriculture sectors. 

Chicago 
The Seventh District found that modest increases in consumer spending, wage gains, and construction and real estate activity were offset by rising prices and slight decreases in business spending and manufacturing. Employment, non-business contacts, and prospects for 2025 farm income all remained flat. 

Cleveland 
The Fourth District reported no change from the prior period. Its construction sector benefited from lower interest rates, and modest improvements are expected in the coming weeks. 

Dallas 
The service sector, retail sales, manufacturing growth, and housing and energy activity all remained weak. Employment dipped, and business sentiment deteriorated due to slowing demand, policy uncertainty, and persistent inflation. Overall economic activity and modest wage growth remained steady. Loan demand increased, and price pressures eased somewhat in the service sector. 

St. Louis 
The district reported a slightly pessimistic outlook despite unchanged market conditions. It cited immigration policies as causing challenges, such as labor shortages, price increases, and inflation, that are limiting consumer purchasing power. The region said overall credit conditions remain strong. Agricultural conditions continued to suffer, and banking activity was unchanged.