Beige Book: Economic growth hit by tighter consumer spending

In the manufacturing sector, activity declined in most districts, with two reporting that “declines were part of ongoing contractions in the sector.”

Some districts mentioned lower auto sales due to high interest rates, while others noted increases in sales despite elevated rates.

The employment rate across all districts held steady but consumer spending ticked down in most districts, the survey found.

Prices increased modestly and wage growth was modest, according to the report. And increases in nonlabor input costs and selling prices were tame.

The Beige Book is a summary report of commentary on current economic conditions across the Federal Reserve’s 12 districts. It really is a book—it includes a ton of information. You can access the report for a deeper dive into economic activity in specific regions across the country.

Below is a summary of three of the districts, with a focus on manufacturing.

Philadelphia district

In the Philadelphia district, business activity declined slightly after rising modestly last period. Employment appeared to decline slightly, while consumer spending edged down.

Nonmanufacturing activity held steady. Wage growth continued at a modest pace, as did reported rises in input costs and prices. Expectations for future growth remained slightly positive overall, especially in manufacturing.

Chicago district

In the Chicago district, which includes northern Illinois and Indiana, southern Wisconsin, Michigan, and Iowa, the economic activity increased slightly with a slight gain in employment and business spending.

Manufacturing activity and consumer spending were flat, and nonbusiness contacts saw little change in activity. Construction and real estate activity edged down, but prices were up modestly and wages rose moderately. Financial conditions were little changed, though.

San Francisco district

San Francisco, the Fed’s 12th District, encompasses the states of California, Oregon, Washington, Idaho, Nevada, Utah, Arizona, Alaska, and Hawaii.

Economic activity remained stable, while employment levels and prices rose slightly.

Wages grew modestly, and retail sales were stable, while activity in consumer services and manufacturing ticked down a bit.

Conditions in the agriculture, residential, and commercial real estate markets continued to soften slightly. Activity in the financial services sector remained muted.