WASHINGTON — Economic activity picked up modestly across much of the country in recent weeks, but price pressures also intensified, according to the Federal Reserve’s latest snapshot of the economy.
In its Federal Reserve Beige Book, released Wednesday, the central bank said overall economic activity rose at a slight to modest pace in eight of its 12 regional districts. That marked an improvement from the previous three reports, when a majority of districts reported little change.
Most districts reported slight to modest growth in consumer spending, largely tied to the holiday shopping season. However, the Fed said spending gains were uneven.
Stronger Spending by Some
Several districts reported stronger spending by higher-income consumers, particularly on luxury goods, travel, tourism and other experiential purchases. At the same time, low- to moderate-income consumers were described as increasingly price sensitive and more hesitant to spend on nonessential goods and services, according to the Beige Book.
Despite the pickup in activity, prices continued to rise at a moderate pace across most districts, the report said. Tariff-related cost pressures were cited consistently nationwide.
“Several contacts that initially absorbed tariff-related costs were beginning to pass them on to customers as pre-tariff inventories became depleted or as pressures to preserve margins grew more acute,” the report said.
Additional Findings
Other findings in the report included:
- Banking conditions were generally stable or improving, with increased demand in some areas for credit cards, home equity loans and commercial lending.
- Auto sales were little changed to down across most districts.
- Residential real estate sales, construction and lending activity softened in most districts that reported on the sector.
- Outlooks for future economic activity were mildly optimistic, with most districts expecting slight to modest growth in the coming months.
About the Beige Book
The Beige Book is published eight times a year and compiles anecdotal information on current economic conditions from each Federal Reserve district. It is based on reports from bank and branch directors and interviews with business leaders, economists, market experts and other contacts.
