The latest Federal Reserve Beige Book report released Wednesday shows a slight expansion in overall economic activity, with 10 of the 12 districts showing growth, a mild improvement from previous findings.
Consumer spending displayed minimal growth, manufacturing activity declined slightly and employment rose modestly.
Several regions noted a cautiously optimistic economic outlook.
Key Details From April Fed Beige Book
Consumer Spending, Retail
- Consumer spending saw a negligible overall increase, affected by heightened price sensitivity among buyers.
- Discretionary spending remained weak, although automotive spending surged in some areas due to better inventories and incentives from dealers.
- Tourism showed a modest rise, although this varied significantly by district.
- The manufacturing sector experienced a slight downturn with only three districts reporting growth.
- Nonfinancial services displayed slight improvement, contrasting with flat performance in banking and lending services.
- Residential construction saw minor growth, with home sales strengthening in most districts.
- Nonresidential construction did not show progress, and commercial real estate leasing dipped slightly.
- Employment trends were slightly positive, with most districts reporting slow to modest increases.
- Wage growth was moderate in eight districts, with signs of stabilization as annual wage growth rates realign with historical averages.
- Price hikes were modest and consistent with previous reports despite disruptions like the Red Sea blockage and the Key Bridge collapse in Baltimore.
- Energy prices rose moderately in half of the districts, while several districts reported "sharp increases in insurance rates."
- Firms reported diminished ability to pass on cost increases to consumers, affecting profit margins.