Overall Economic Activity
Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District where growth was described as slight. Manufacturers in all Districts expressed concern about tariffs and in many Districts reported higher prices and supply disruptions that they attributed to the new trade policies. All Districts reported that labor markets were tight and many said that the inability to find workers constrained growth. Consumer spending was up in all Districts with particular strength in Dallas and Richmond. Contacts reported higher input prices and shrinking margins. Six Districts specifically mentioned trucking capacity as an issue and attributed it to a shortage of commercial drivers. Contacts in several Districts reported slow growth in existing home sales but were not overly concerned about rising interest rates. Commercial real estate was largely unchanged.
Employment and Wages
Employment continued to rise at a modest to moderate pace in most Districts. Labor markets were described as tight, with most Districts reporting firms had difficulty finding qualified labor. Shortages were cited across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, IT professionals, and truck drivers; some Districts indicated labor shortages were constraining growth. Districts noted firms were adding work hours, strengthening retention efforts, partnering with local schools, and converting temporary workers to permanent, as well as raising compensation to attract and retain employees. On balance, wage increases were modest to moderate, with some differences across sectors; a couple of Districts cited a pickup in the pace of wage growth.
Prices increased in all Districts at a pace that was modest to moderate on average; reports showed upticks in inflation in several Districts. The prices of key inputs rose further, including fuel, construction materials, freight, and metals; a few Districts described these input price pressures as elevated or strong. Tariffs contributed to the increases for metals and lumber. However, the extent of pass-through from input to consumer prices remained slight to moderate. Movements in agricultural commodities prices were mixed across products and Districts. Pricing pressures are expected to intensify further moving forward in some Districts, while in others the outlook is for stable price increases at a modest to moderate pace.
Highlights by Federal Reserve District
Business activity continued to expand at a moderate pace, with contacted manufacturers, retailers, hotels, and software and IT firms reporting year-over-year increases in revenues. Some contacts saw higher prices and lower margins. Contacts reported difficulty hiring in skilled occupations.
The regional economy continued to expand at a moderate pace, and labor markets have remained tight. Input price increases have remained fairly widespread, and selling prices continued to increase moderately. Housing markets have continued to firm, on balance, while commercial real estate markets have softened a bit.
Economic activity continued to expand at a modest pace. With tightening labor markets, job growth also remained modest, but wages are now rising moderately. On balance, contacts continued to observe modest price increases with few concerns for future inflation. Notably, nonresidential construction activity has begun to decline from its prior high levels.
The District economy grew moderately. Labor markets tightened, with wage pressures noted broadly. Rising fuel and metals costs are pressuring manufacturers, construction firms, and transportation companies. Stronger confidence in the economy boosted demand in nonfinancial services and the retail sector. Construction activity remained strong.
The regional economy grew at a moderate rate. Manufacturing and retail sales strengthened, but firms in both sectors faced transportation constraints and rising input costs. Trucking firms saw record demand, which was partially unmet due to the driver shortage. Port activity remained strong. Labor demand increased moderately, and some firms reported shortages. Price growth accelerated slightly but remained moderate, overall.
Economic activity modestly expanded since the previous report. The labor market remained tight. Reports of wage growth were mixed. Some commodity input prices continued to increase. Consumer spending improved since the last report. Nonresidential construction increased; however, multifamily construction showed signs of slowing. Manufacturing activity grew.
Growth in economic activity slowed to a modest pace. Manufacturing production increased moderately, while employment, consumer spending, business spending, and construction and real estate activity grew modestly. Wages and prices increased modestly, and financial conditions improved modestly. The outlook for agriculture income dimmed some.
Economic conditions improved slightly. Labor market conditions remained tight and wage growth was modest. Local contacts reported robust increases in shipping costs across all sectors due to higher fuel prices and driver shortages. Businesses' reports on the impact of tariffs have varied by industry.
Economic activity in the Ninth District grew moderately, led by strong growth in manufacturing. Hiring demand remained strong, but workers were harder to find. Wages grew moderately with some signs of stronger growth among union wages. Professional services firms saw growth across the board, and lodging demand appeared robust heading into the summer tourism season.
Economic activity expanded moderately since the previous survey, and growth was expected to continue in the months ahead. Most sectors expanded, including a slight pickup in energy activity, modestly higher consumer spending and business services, moderately stronger real estate activity, and continued robust gains in the manufacturing sector. Capital spending plans across the District were positive.
Economic activity continued to grow at a solid pace. Manufacturing output rose, and broad-based expansion in the services and energy sectors continued. Retail spending rose while drought conditions became more widespread. Hiring remained solid despite a tight labor market, and wage and price pressures stayed elevated. Expectations regarding future business activity were optimistic, although uncertainty arising from U.S. trade policy weighed on outlooks.
Economic activity in the Twelfth District continued to expand at a moderate pace. Conditions in the labor market remained tight, and price inflation increased moderately. Sales of retail goods picked up slightly, and activity in the consumer and business services sectors edged down. Activity in the manufacturing sector and in residential and commercial real estate markets was solid. Lending activity ticked up moderately.