National Summary
Overall Economic Activity
Economic activity increased modestly since early July. Ten of the twelve Federal Reserve Districts reported growth in the slight to moderate range; two Districts reported no change. Consumer spending grew slightly on balance; reports reflected both heightened price sensitivity on the one hand and solid high-end purchases on the other. Auto sales were mostly subdued, dampened by downbeat consumer confidence, high fuel prices, and rising financing costs. Tourism activity increased. Notably, airlines reported strong demand despite higher airfares. Manufacturing activity picked up across most Districts, with some highlighting ongoing strength in demand for defense and data center-related orders. Services firms reported slight to modest increases in activity. Financial conditions improved slightly as loan volumes remained solid or increased across most Districts. Residential construction declined while nonresidential construction increased on balance, with some Districts noting a high concentration of activity related to data center projects. Agriculture conditions saw slight improvement but generally remained strained; the livestock sector was strong while conditions were stressed among crop producers. The general outlook for the coming months was positive, but sentiment was mixed across sectors, with contacts reporting heightened uncertainty surrounding the effects of higher energy prices, policy, and international conflict.
Labor Markets
Employment rose very slightly overall, with three Districts showing modest gains in employment, four reporting slight gains, and five Districts experiencing no change. Eight Districts saw a change in their pace of growth from the previous report, but there was less overall dispersion among Districts. Healthy labor demand was seen most frequently in manufacturing, construction, and some service sectors, while retail and hospitality sectors saw falling labor demand. Labor availability was mixed. Skilled trades and technical workers were difficult to find. Districts also reported both positive and negative effects of artificial intelligence on labor demand. Wage growth was modest to moderate in most Districts. Significant wage increases were most often connected to demand for skilled workers in construction and manufacturing.
Prices
Prices increased moderately in eight Districts, with two Districts reporting modest increases, one slight increases, and one robust increases. Compared with the previous reporting period, the pace of price increases was the same in eight Districts, decreased in three, and increased in one. Input price pressures were notably elevated in manufacturing and construction across multiple Districts, with widespread reports of price increases for energy, transportation, and raw materials, particularly metals and petrochemicals. Retail and manufacturing contacts continued to note tariff-related impacts in multiple Districts. Firms also broadly reported significant health care and insurance cost pressures. Consumer-facing contacts in a few Districts noted that heightened price sensitivity among customers was putting a limit on their ability to pass through input price increases.
Highlights by Federal Reserve District
Boston
Economic activity grew slightly, with similar performance across most sectors. Employment and wages each ticked up a bit, and prices rose slightly as well. Boston experienced strong consumer spending in recent months, but spending was flat or softer elsewhere. The outlook was marked by increased concerns related to the negative impact of inflation on consumers' budgets.
New York
Economic activity continued to increase modestly, with particular strength in manufacturing. On balance, employment held steady. Selling price increases eased slightly but remained moderate, while input prices rose strongly. Supply chain strains emerged in the tech and defense sectors.
Philadelphia
Business activity rose modestly this period, up from a slight increase in the last period. Employment improved slightly, as both manufacturers and nonmanufacturers reported increased hiring. Wage inflation again grew modestly, and firm price inflation edged down to a modest pace. Expectations for future growth rose at a strong pace for manufacturers but remained below the long-run average for nonmanufacturers.
Cleveland
Fourth District business activity increased modestly, with moderate growth expected in the months ahead. Manufacturing demand grew robustly, driven by data centers and defense spending, while consumer spending declined for the fourth consecutive period. Nonlabor costs remained robust for the tenth consecutive period, and prices rose moderately.
Richmond
The regional economy continued to expand moderately this cycle. Consumer spending continued to grow, particularly for travel and experiential goods and services. Port volumes grew moderately and nonfinancial services saw modest growth in demand and revenues. The remaining sectors reported activity as flat to slightly down. Employment and price growth remained moderate.
Atlanta
Economic activity grew modestly. Employment levels remained largely flat. Wages rose moderately, and costs and prices increased at a moderate pace. Consumer spending and transportation activity expanded modestly. Residential real estate conditions were little changed. Commercial real estate, manufacturing, and energy sectors grew moderately. Lending increased at a modest pace.
Chicago
Economic activity increased slightly. Manufacturing demand rose modestly; employment was up slightly; consumer spending and construction and real estate activity were flat; business spending declined slightly; and nonbusiness contacts saw no change in economic activity. Prices rose moderately, wages rose modestly, and financial conditions tightened slightly. Farm income expectations improved some.
St. Louis
Economic activity has modestly increased. Employment was unchanged and wage growth remained moderate. Prices have risen at a robust pace and were widespread. The outlook has slightly improved, with contacts citing uncertainty, supply chain disruptions, and high fuel costs from the Middle East conflict continuing to affect conditions.
Minneapolis
Ninth District economic activity grew slightly. Employment grew and hiring increased. Prices increased at the same pace as the last report, with elevated input pressures. Consumer spending was down and tourism was hampered by heat and wildfire smoke. Loan demand grew slightly. Agricultural contacts were worried about drought.
Kansas City
Business activity had little change within the Tenth District, though underlying conditions softened. Retailers and manufacturers drew down inventories amid elevated prices and uncertain demand. Labor was the top growth constraint as hiring difficulties broadened. Cost pressure prompted more frequent price adjustments. Expectations for the District became more mixed across sectors.
Dallas
Economic activity in the Eleventh District expanded moderately. Growth picked up in the manufacturing, banking, and energy sectors, while it slowed in nonfinancial services. Retail sales increased. Agriculture conditions deteriorated due to drought conditions. Employment grew modestly with moderate wage growth. Price rose moderately to robustly. Outlooks were stable to positive.
San Francisco
Economic activity was little changed. Employers maintained staffing levels. Prices rose modestly, while wages increased slightly. Retail sales were stable, while demand for services eased slightly. Conditions were little changed in manufacturing and agriculture. Residential real estate activity declined somewhat, while commercial real estate and financial services activity remained stable.
Note: This report was prepared at the Federal Reserve Bank of Minneapolis based on information collected on or before August 24, 2026. This document summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.