Market Data
March 5, 2026
Beige Book: Majority of districts see modest economic growth
Written by Kristen DiLandro
Economic activity across the US increased at a light-to-modest pace in seven of the 12 Federal Reserve Districts, according to the US Federal Reserve’s latest Beige Book report.
The Fed’s latest economic report, posted on March 4, consists of economic reports collected on or before Feb. 23 and prepared by the Federal Reserve Bank of Cleveland. Typically, the report is released a few weeks ahead of policy meetings, a total of eight times per year.
Overview
In contrast to increased consumer spending, on balance, two districts reported declining activity attributed to heightened price sensitivity, increased economic uncertainty, and decreased spending from lower-income households.
Manufacturing improved compared with the past reporting period. Most districts reported increased orders, supported by data center development and energy infrastructure projects. Transportation activity results were mixed in this report.
Affordability and low inventories were two factors cited for softening conditions in the residential real estate and construction sectors. However, non-residential construction ticked up.
Districts reporting on automotive sales noted affordability as the factor suppressing auto sales. Agriculture conditions were flat, energy grew modestly, and financial services ranged from stable to strong. Winter weather conditions crimped retail spending, and urban retail spending contraction was attributed to upticks in immigration enforcement activity disruptions.
Most districts reported little change in hiring since the last report. Firms noted softer demand, climbing non-labor input costs, and overall uncertainty as the reasons employers are exercising cautiousness. Wages continued to increase modestly for skilled trades. Rising healthcare costs are exerting upward pressure on compensation.
Overall, increases in insurance costs, utilities, energy, metals, and raw materials are blamed for increasing prices. Tariffs were cited throughout the report as contributing to the price hikes. However, consumer price sensitivity was noted as a prohibitive factor for firms to sell through operational cost increases.
Districts with growing economic activity
In Philadelphia, economic activity grew modestly, slightly upping the pace from last period. Sales activity grew, despite adverse weather. Employment levels ticked up. Spending in low-, middle-, and fixed incomes remained cautious. Firms reported own-price inflation declined from the first quarter but reported that wages remained inflated.
Cleveland reported that the district experienced a recent uptick in business activity. Activity elevated due to stronger demand in the manufacturing and commercial construction industries. Data center development drove the activity. Nonlabor costs held at elevated levels from the last report and firms report increasing selling prices at a moderate pace.
In Richmond, Va., activity continued to make modest gains. Retail activity remained flat, but the travel and tourism uptick offset the stagnant activity. Commercial real estate and employment clocked some upward momentum, but manufacturing and residential real estate activity slipped. Prices continued to rise at a moderate year-on-year rate.
Economic activity in Atlanta expanded at a modest to moderate pace this period. Stronger consumer spending, tourism, housing demand, and energy activity supported growth. Employment remained flat to lower, commercial real estate slowed, and prices were flat to modestly higher.
Chicago reported a slight increase in activity due to an uptick in manufacturing demand. Consumer spending, construction, and real estate edged up. Prices rose and wages increase moderately. Employment and business activity remained flat and farm income expectations for 2026 held at 2025 levels.
The 10th district of Kansas City reported slight increases in its economic activity since the prior report. Labor conditions held steady, highlighting how firms used to technology and workflow improvements to ease operational constraints. Overall prices increased. Energy activity grew as natural gas and oil price increases supported more drilling.
Dallas reported that strong manufacturing activity and modest gains in services led to moderate activity expansion. Bank lending, retail sales, commercial real estate transaction activities all increased. However, energy and agriculture activity declined. Employment and wages grew, but prices rose moderately.
Districts with no change in economic activity
St. Louis reported no change in activity since the previous report. However, the district expects growth in the coming months. Employment remained stable. Prices and wages increased and the district noted its cautious optimism for outlook.
Boston also reported that activity remained flat. Employment slipped, consumer spending held at the same level as the last report, tariffs put cost pressure on the district, and contributed to rising prices. Certain food items fell from elevated levels in the last report. Low-income households report intense financial pressures.
Districts with declining economic activity
New York reported a modest slip in economic activity despite small gains it picked up in manufacturing. Employment levels held flat, and wage growth was steady to modest. Selling prices remained moderately elevated. Consumer spending grew slightly despite reportedly more caution paid to large purchase items. Business outlook is generally positive.
San Francisco also reported contraction in its economic activity. Employment held stable despite overall broadened activity slowdowns.
Minneapolis reported softened labor demand and employment overall as its economic activity fell slightly. Consumer spending dropped, wages fell, and prices ticked up. While agriculture conditions remained mostly unchanged at weak levels, construction activity and nonresidential building sectors experienced large declines.
