What the Fed's Beige Book Said About the Economy

The Federal Reserve Open Market Committee's BeigeBook economic report said there was very little change in economic activity in September. Two districts reported growth, and most districts reported a decline in manufacturing.

The report said that banks were worried about the future because of a decline in interest rates. Some districts said consumer spending moved to cheaper choices. The housing market stayed healthy, commercial real estate was flat, and infrastructure projects helped a few districts. According to the report, the dock worker's strike caused a short disruption, while hurricanes brought crop damage and tourism pauses in the Southeast.

Employment rose overall, the report said, with half the districts showing growth. Many reported lower turnover, and low layoffs, though demand for workers eased. Wages rose.

Price inflation continued in most districts. Some prices, like eggs and dairy, grew faster. Home prices climbed, and insurance and healthcare costs rose. Multiple Districts reported that input prices generally rose faster than selling prices, compressing firms’ profit margins.

Boston

Economic activity was flat, as was employment, and prices increased slightly. International travel was a bright spot, and the summer tourism season on Cape Cod was described as strong. More broadly, consumers remained highly price conscious, and certain manufacturers had persistently weak sales. Home sales and home prices softened noticeably over the summer. Contacts were cautiously optimistic about the outlook for late 2024 and 2025.

New York

On balance, regional economic activity was little changed. Employment increased slightly and wages continued to increase moderately. Housing markets remained solid, with home prices continuing to edge up. Selling price increases remained modest. Capital spending plans were strong, with some investments already underway.

Philadelphia

Business activity continued to decline slightly in the current Beige Book period. Consumer spending fell modestly, and nonmanufacturing activity fell slightly. Employment appeared to rise slightly, after falling slightly last period. Wage growth continued at a modest pace, as did reported rises in input costs and prices. Expectations for future growth rose—becoming more widespread for both manufacturers and nonmanufacturers.

Cleveland

Overall, Fourth District business activity was stable. Residential construction and real estate activity increased and demand for nonfinancial services remained strong. By contrast, consumer spending and demand for manufactured goods remained soft. Employment levels were stable. On balance, wages increased modestly, nonlabor costs grew moderately, and selling prices increased slightly.

Richmond

The regional economy grew modestly this cycle. Consumer spending picked up, loan demand increased, manufacturing activity expanded, port activity rose, and employment grew slightly. Ports in the District were minimally impacted by the short-lived worker strike; however, parts of our District were heavily affected by Hurricane Helene; the full impacts of the loss of life and property were still being assessed.

Atlanta

The economy of the Sixth District declined slightly. Employment was steady and wages grew slowly. Prices were little changed, and pricing power softened. Consumer spending slowed, and tourism decelerated. Demand for housing was flat. Transportation activity increased slightly. Loans grew modestly. Manufacturing declined and energy activity slowed. Agriculture conditions weakened.

Chicago

Economic activity increased slightly. Consumer spending rose modestly; employment was up slightly; construction and real estate activity was flat; nonbusiness contacts saw little change in activity; and business spending and manufacturing activity edged down. Prices were up modestly, wages rose moderately, and financial conditions loosened slightly. Prospects for 2024 farm income were unchanged.

St. Louis

Economic activity across the Eighth District has remained unchanged since our previous report, despite continuing to show some signs of slowing demand. Across the District, contacts expressed their intention to maintain employment levels in the upcoming months. Prices continued to increase modestly with some input costs remaining unchanged or decreasing. The outlook among contacts remains slightly pessimistic but has modestly improved for many.

Minneapolis

Economic activity declined slightly since the last report. Employment grew but labor demand continued to soften. Prices increased slightly overall, with greater pressure on input prices, while wages increased moderately. Consumer spending was flat, with some contacts expressing concern for consumer financial health. Manufacturing decreased moderately. Commercial and residential construction declined slightly. Agricultural conditions were stable at low levels.

Kansas City

District economic activity was steady as mild growth in consumer spending offset slower manufacturing and professional service activity. Employment levels remained flat on net, though more contacts reported reducing their staffing levels recently. Business contacts reported more delays in receiving payments, raising financial strains but not affecting their hiring plans.

Dallas

Economic activity rose modestly over the reporting period, buoyed by a pickup in growth in nonfinancial services. Housing demand held steady, while retail sales, loan demand, and manufacturing output weakened. Employment increased, and wage growth was moderate. Outlooks were mixed, with domestic policy and economic uncertainty cited as key concerns.

San Francisco

Economic activity was steady. Labor availability improved further, and wages grew slightly. Overall prices were largely stable. Retail sales and activity in manufacturing and consumer services softened. Demand for business services improved, while conditions in real estate, financial services, agriculture, and resource-related industries were largely unchanged.