Federal Reserve Beige Book: Economic activity in most regions of the United States has seen slight growth, and businesses are more optimistic about future demand

On Wednesday, the Federal Reserve stated in its latest Beige Book report that after several months of little change, U.S. economic activity saw a slight increase in November. Although the overall growth in economic activity was modest, growth expectations in most regions and industries have risen moderately. Businesses expressed greater optimism about future demand, while consumer spending remained generally stable. Employment levels were flat or only slightly increased. The economic conditions depicted in the Federal Reserve's Beige Book report are bleaker than official statistics, showing that the country's economic growth is stagnant, hiring rates are declining, and prices are rising slightly. In many cases, this contradicts economic data, which indicates that U.S. economic activity remains strong, consumer spending is robust, and the unemployment rate is relatively low. Reports from various Federal Reserve districts indicated that inflation rose only slightly, as consumers became increasingly sensitive to prices, limiting businesses' ability to pass on rising costs to consumers. In terms of the labor market, hiring activity is considered sluggish due to low employee turnover, although layoffs are also limited. Business leaders indicated that they expect employment to grow steadily or slightly. Surveys showed that wage growth in most regions has slowed to moderate levels, and wage growth is expected to remain similar in the coming months. The Beige Book report includes anecdotes and comments on economic conditions from businesses and other contacts in the 12 Federal Reserve districts. The Beige Book, along with a series of U.S. economic data, will help influence Federal Reserve policymakers' discussions at their meeting on December 17-18, when they will decide whether to cut interest rates for the third time. This Beige Book was compiled by the Kansas City Federal Reserve, based on information collected through November 22, by which time the U.S. presidential election had been settled. Overall, the report reflects a cautiously optimistic sentiment in U.S. economic activity. Despite moderate economic growth and controlled inflation, price sensitivity, employment challenges, and regional issues remain ongoing concerns. Key Points from Regional Federal Reserve Reports Here are the key points from the regional Federal Reserve reports: Boston: Warm autumn weather led to a significant decline in sales of winter goods and snow vehicles. New York: Uncertainty surrounding the presidential election has temporarily stalled hiring decisions, but businesses expect conditions to improve. Philadelphia: The manufacturing sector is optimistic about future orders and shipment growth, but capital expenditure plans have not changed. Cleveland: Retailers are using promotions to cope with weak demand and consumer price sensitivity. Richmond: Hurricane Helen severely impacted the North Carolina real estate market, with residential sales in some areas down 25%-35%. Atlanta: Rising mortgage rates and weather events have led to a decline in housing demand, particularly in certain areas of Florida where there is an oversupply of homes. Chicago: Retailers are increasing inventory due to tariff concerns, and some businesses are replacing imported electronics ahead of schedule. St. Louis: The automotive manufacturing sector has increased shifts due to production delays caused by earlier hurricanes, but layoffs in electric vehicle manufacturing are occurring due to weak demand. Minneapolis: Agricultural conditions remain weak, with 85% of respondents reporting a decline in farm income, primarily due to low commodity prices and high operating costs Kansas City: The demand for data centers is driving the growth of power generation capacity, but infrastructure expansion faces challenges such as permitting delays, high equipment costs, and labor shortages. Dallas: A decline in oil price expectations may lead to reduced capital expenditures in 2025, but the suspension of liquefied natural gas export permits may soon end, providing opportunities for related infrastructure investment. San Francisco: Labor mobility is stabilizing but remains below the peak levels seen during the pandemic. Businesses are facing difficulties in employee retention and mismatches between job seekers' skills and job requirements