Fed Beige Book: Most Districts Report Modest Economic Growth, Employment and Inflation Growing "Slightly or Moderately"

According to the latest "Beige Book" report released by the Federal Reserve on Wednesday, economic activity in most regions of the United States has remained relatively stable since early September. The report indicates that in more than half of the 12 Federal Reserve districts, employment has seen "slight or moderate" growth, with most regions reporting "slight or moderate" price increases. Most regions also noted a slowdown in wage growth. The report states, "Overall, economic activity in almost all regions has remained largely unchanged since early September, with two regions reporting moderate growth. Reports on consumer spending have been mixed, with some regions noting changes in consumer purchasing patterns, mainly shifting towards cheaper alternatives." Despite unexpected increases in official statistics for September in employment, consumer prices, and retail sales, the U.S. economy continues to slow down. While the latest data has shown some improvement, Federal Reserve officials have recently cited anecdotal evidence from contacts as reasons to continue cutting interest rates. Economist Eliza Winger from Bloomberg stated in a report following the release, "The latest Beige Book from the Federal Reserve once again presents a softer picture of the U.S. economy than hard data. We believe that the latest assessment of slowing economic growth may alleviate concerns in the market about the Fed having to pause rate cuts." According to the report, in the Atlanta Federal Reserve district, which includes areas most severely affected by Hurricane "Helen," the storm has led to a decline in the tourism industry and caused "significant damage and losses" to farmers in parts of southern Georgia and Florida. The Beige Book also mentions approximately 15 times that the uncertainty surrounding the U.S. presidential election in November is a source of uncertainty, or one of the factors leading consumers and businesses to delay investment, hiring, and procurement decisions. The latest version of the Beige Book was compiled by the New York Federal Reserve using information collected up to October 11th. The report includes anecdotes and comments from businesses and other contacts in the Federal Reserve's 12 districts on the economic situation. Below are the key points from each district's report: Boston: "Retail and hotel hiring in the Cape Cod area received a boost during the summer due to the restoration of short-term visas for foreign workers and an increase in the supply of seasonal domestic workers." New York: "Sales in the restaurant industry have declined due to a decrease in visitors. Nevertheless, attendance rates for Broadway shows have improved, with recent attendance slightly below pre-pandemic levels." Philadelphia: "Contacts indicate that loan demand growth in most industries remains lukewarm, with the most common reasons being expectations of further interest rate cuts and the upcoming election, which are reasons for delaying investment plans." Cleveland: "Most contacts across industries report that they have not adjusted their sales prices in recent weeks, and contacts continue to report that customers are unwilling to accept additional price increases." Richmond: "While many businesses report improved candidate quality and moderate wage growth, some businesses still face challenges in finding specific types of workers. To attract those hard-to-find workers, businesses have significantly raised wages and sought external assistance." Chicago: "Contacts point out that customers from all income levels are experiencing 'consumption downgrading.' For example, low and middle-income consumers are opting for cheaper value meals at fast-food restaurants instead of pricier options, while high-income consumers are choosing more affordable furniture and appliances." Atlanta: "Car dealerships have noticed an increase in inventory and a greater degree of demand softness than the normal seasonal decline. They have also observed that luxury car sales have not slowed down as much as other vehicle types, but these buyers are increasingly pushing prices down." St. Louis: "Several hotel industry contacts have indicated that demand is higher than a year ago and has mostly met expectations. However, their venues' concession spending is lower relative to the prices of their activities, suggesting that tourists are more sensitive to higher commodity prices." Minneapolis: "Companies with vacant positions report a significant improvement in labor supply. A source from a Minnesota supply company mentioned receiving 12 applications for high-skilled driving positions that were previously difficult to fill, stating, 'It's unbelievable.'" Kansas City: "Many businesses attributing their expanded activities to promotions, sales, or discounts. Meanwhile, those reporting a decline in consumer spending emphasize the contraction of luxury or high-end goods and services." Dallas: "Contacts mention a continuous increase in aid requests from the elderly, attributing it to inflation. A non-profit organization reports a rising vacancy rate in their elderly-specific housing facilities as elderly individuals re-enter the workforce out of economic necessity, causing them to lose eligibility for these low-cost housing options." San Francisco: "Consumers continue to seek discounts and are unwilling to pay full price for non-essential items. Some reports highlight that families affected by recent and ongoing labor disputes in the Pacific Northwest have reduced their spending."