Economy

Beige Book shows mixed economic trends, manufacturing challenges, tariff concerns

January 16, 2025

General economic activity across the US experienced slight to moderate growth at the end of 2024, while activity in manufacturing showed a slight decline, according to the Federal Reserve’s Beige Book report issued this month.

Industrial performance varied across regions in late November and December, with notable challenges in demand and managing costs. Many districts observed limited growth or a slight contraction in industrial activity since the last report.

There were some regional disparities in regard to the health of manufacturing. While the Dallas district reported a resurgence in manufacturing, the Minneapolis district showed a modest contraction. Richmond and Atlanta had slight declines in manufacturing output.

Input costs and selling prices in the manufacturing sector generally rose modestly, though there were some reports of flat or even lower prices in some regions.

Several districts noted that manufacturers were stockpiling inventories in anticipation of higher tariffs, reflecting the uncertainties in trade policy.

Despite the challenges, some contacts expressed optimism about a potential recovery in manufacturing in 2025. However, concerns over policy changes and global economic conditions tempered that optimism.

The report suggested the automotive sector outperformed broader trends in consumer spending. Automotive sales led the growth in consumer spending in the Philadelphia and Kansas City districts. Manufacturers and dealers expressed caution about the future, however, with concerns about the potential impacts of tariffs, higher interest rates, and changing consumer preferences.

For a deeper dive into the economic conditions presented by the Fed, check out the entire Jan. 15 Beige Book report here.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.