National Summary
Overall Economic Activity
Most of the twelve Federal Reserve Districts reported that their economies expanded at a modest or moderate pace from mid-October through late November, though both Dallas and Philadelphia noted slower growth compared with the prior Beige Book period. St. Louis and Kansas City noted just slight growth. On balance, consumer spending held steady – District reports on growth of nonauto retail sales appeared somewhat weaker while auto sales tended to improve, particularly for used cars. Tourism reports varied but generally kept pace with the economy. Tariffs remained a concern for manufacturers, but a majority of Districts continued to report moderate growth in the sector. All Districts reported growth in nonfinancial services – ranging from slight to strong. New home construction and existing home sales tended to decline or hold steady, while construction and leasing of nonresidential structures tended to rise or remain flat. Overall, lending volumes grew modestly, although a few Districts noted some slowing. Agricultural conditions and farm incomes were mixed; some Districts noted impacts from excessive rainfall and from tariffs, which have constrained demand. Most energy sectors saw little change or modest growth. Most Districts reported that firms remained positive; however, optimism has waned in some as contacts cited increased uncertainty from impacts of tariffs, rising interest rates, and labor market constraints.
Employment and Wages
Labor markets tightened further across a broad range of occupations. Over half of the Districts cited firms for which employment, production, and sometimes capacity expansion had been constrained by an inability to attract and retain qualified workers. In fact, several Chicago firms reported that some employees have simply quit – with no notice nor means of contact. Partly as a consequence of labor shortages, most Districts reported that employment growth leaned to the slower side of a modest to moderate pace. Conversely, most Districts reported that wage growth tended to the higher side of a modest to moderate pace. In addition to raising wages, most Districts noted examples of firms enhancing nonwage benefits, including health benefits, profit-sharing, bonuses, and paid vacation days.
Prices
On balance, prices rose at a modest pace in most Districts, although a few noted moderate increases. Nearly all reported that input costs rose faster than final goods prices. Reports of tariff-induced cost increases have spread more broadly from manufacturers and contractors to retailers and restaurants. Local growing conditions caused prices to vary across farm products and among Districts, but reported soybean prices were typically lower. Several Districts noted falling oil and fuel prices, as well as rising freight costs. House prices continued to rise in a majority of markets.
Highlights by Federal Reserve District
Boston
Activity continued expanding at a moderate pace ac-cording to business contacts across most sectors. Staffing firms said labor markets were very tight across industries and occupations, while retailers and manufacturers cited shortages only for selected jobs. Increases in selling and input prices were reported to be modest.
New York
The regional economy expanded at a modest pace in the latest reporting period, while labor markets remained exceptionally tight. Widespread escalation in firms' input prices have continued, but wages and selling prices have increased more moderately. Tourism has picked up, while housing markets have softened somewhat. Banks noted widespread improvement in delinquencies.
Philadelphia
Economic activity continued to expand at a modest pace, although it appears to have eased a bit, with downshifts (or declines) in five distinct sectors. Lack of qualified labor has constrained hiring and raised wage pressure. Price increases remained modest. Nevertheless, firms remain generally positive about the six-month outlook.
Cleveland
The District economy grew modestly. Demand was strong in banking, manufacturing, and nonfinancial services. Consumer demand improved slightly, but housing demand softened. Staff levels rose moderately, and wage pressures were widespread. Input costs rose strongly in all industries. Contacts noted that tariffs were lifting prices further down the supply chain. Selling prices rose with less intensity than they did for input costs.
Richmond
The regional economy continued to grow at a moderate rate since our previous report. Labor demand strengthened further while wage growth remained modest. Price growth increased slightly but remained moderate, over-all. Manufacturing and services firms saw a sharp in-crease in input prices, which were attributed to tariffs, shipping costs, and some higher business-to-business and recruitment costs.
Atlanta
Economic conditions moderately improved. Tightness in the labor market persisted and more firms reported increasing wages. Nonlabor costs continued to rise. Retail sales increased across most of the District. Tourism activity was positive. Residential real estate market activity was restrained, and commercial real estate activity remained solid. Manufacturers indicated that activity increased. Credit conditions were stable.
Chicago
Growth in economic activity was modest. Manufacturing production grew moderately; employment, consumer spending, and business spending increased modestly; and construction and real estate activity decreased slightly. Wages and prices rose modestly and financial conditions were little changed. Large yields led agricultural conditions to improve some.
St. Louis
Economic conditions have slightly improved since our previous report. Labor market conditions remain tight, and many firms report raising wages and salaries to attract new workers. The outlook among firms surveyed in mid-November was slightly optimistic, although weaker than the outlook one year ago.
Minneapolis
The Ninth District economy grew moderately. Hiring demand was robust, but a tight labor supply was restraining employment growth. Nevertheless, wage pressures were moderate overall, with exceptions. Some firms reported paying a greater share of workers' health insurance premium costs to attract and retain employees. Price growth was generally modest, though input prices saw more pressure.
Kansas City
Economic activity expanded slightly since the previous survey and remained modestly above year-ago levels. Employment and wages rose further, and about half of respondents expected to increase employment in the next twelve months. Manufacturing, wholesale trade, transportation, energy, and professional and high-tech sectors reported the strongest growth in the District, while the agriculture sector remained weak.
Dallas
Growth in economic activity slowed to a moderate pace. A broad-based softening was seen in manufacturing, retail, and housing. Drilling activity increased. Hiring continued, and widespread labor shortages pushed up wages. Price pressures eased but remained elevated in part due to the tariffs, and outlooks were less optimistic than the previous report.
San Francisco
Economic activity in the Twelfth District continued to expand at a moderate pace. Labor market conditions tightened further, and price inflation increased moderately. Sales of retail goods expanded somewhat, and activity in the consumer and business services sectors was solid. Conditions in the manufacturing sector strengthened. Activity in real estate markets was solid on balance. Lending activity ticked down modestly.