National Summary
Overall Economic Activity
Since the prior Beige Book, two of the twelve Federal Reserve Districts reported moderate growth in economic activity. Three Districts reported modest growth, while four reported slight growth, and three reported no significant change. Robust, broad-based growth in manufacturing led the moderate growth reported in the Dallas District. While not as robust, another six Districts reported modest to moderate growth from their manufacturing firms. The remaining five Districts noted little or no manufacturing growth. Reports on other sectors indicate little growth overall. Most Districts reported little or no change in overall consumer spending. Auto contacts noted flat to modestly lower sales in five of the six Districts that reported. Over half of the Districts noted that consumer spending was driven by high-income households. Even in Dallas, where District firms reported solid retail sales, there were "some reports of lower-income customers being more cautious with spending." Tourism continued to grow, but firms in the Boston, Minneapolis, and San Francisco Districts noted a decline in sales from Canadian tourists. Overall, most Districts reported that firms have maintained a positive economic outlook for the coming months. However, expectations tend to be for slight growth, weighted toward manufacturing and burdened by persistent uncertainties.
Labor Markets
Most Districts described little or no net change in overall employment levels. While three Districts described modest increases, five reported slight increases, and four reported no significant change. Overall, labor market conditions were little changed. Labor supply was generally adequate to meet demand; however, shortages persisted for specialized, technical, and skilled trade workers. Five Districts reported that some firms had either reduced staffing levels (through attrition), delayed hiring, or anticipated less job creation after increasing productivity by investing in AI. Five Districts described moderate growth in overall wages, four reported modest growth, and two reported slight growth. Several Districts noted that inflation has spawned additional wage pressure in the form of higher cost-of-living demands from individuals as well as challenges from rising benefit costs. Staffing contacts in the Boston District noted that workers were motivated to seek new jobs as wage increases lagged inflation.
Prices
Three Districts characterized overall price growth as robust, while eight noted that growth was moderate—and three of the eight noted that input price pressures were intensifying, if not already growing robustly. One District reported modest price growth. Moreover, four Districts reported that the pace of price increases picked up since the prior period. Higher oil prices permeated all District reports. Firms reported elevated diesel prices and noted that fuel surcharges were passing on increased costs throughout the supply chain. Contacts in multiple Districts also noted continued price pressure from other commodities, tariffs, and insurance. Consumer-facing firms noted tighter profit margins as price-sensitive customers continue to resist price hikes. Contacts are managing their margins with selective price hikes, targeted incentives, and menu changes that reduce their costs. Firms in several Districts cited persistent uncertainty around energy and tariffs and expect that prices will increase further in the coming months, as existing contracts expire, and firms must renegotiate hedge contracts for their own inputs and/or delivery contracts to their customers.
Highlights by Federal Reserve District
Boston
Economic activity expanded further, slightly. Consumer spending was flat, with an uptick in tourism spending but softer retail sales. Employment rose by a small margin, with wages up slightly on average. Home sales showed new weakness. Inflation was modest overall, but home heating oil prices rose sharply from a year earlier, raising concerns about heating costs for the winter.
New York
Economic activity increased slightly, led by strength in manufacturing. Rising costs and heightened uncertainty weighed on businesses and consumers. Employment was steady to up slightly and wage growth remained modest. Selling price increases picked up to the high end of the moderate range, while input prices continued to rise strongly. Consumer spending edged up.
Philadelphia
Business activity rose slightly this period, down from a modest increase in the prior period. Employment improved modestly, as both manufacturers and nonmanufacturers reported increased hiring. Wage inflation again grew modestly, and firm price inflation edged up to a moderate pace. Looking ahead, manufacturers have more widespread expectations for growth than nonmanufacturers.
Cleveland
Fourth District business activity increased modestly, with slight growth anticipated in the months ahead. Manufacturing demand rose moderately, while retailers continued to face dampened demand from higher fuel prices. Employment levels increased modestly, and wage pressures remained moderate. Nonlabor cost pressures remained strong, and selling prices grew robustly.
Richmond
The regional economy continued to grow moderately. Consumer spending remained solid amid continued tradeoffs due to higher gas prices. Hotels reported strong occupancy rates this cycle. Manufacturing activity was flat despite strength reported in some high-growth sectors and regions. Nonfinancial services reported modest growth while the remaining sectors reported little change in activity. Employment grew slightly and price growth remained moderate.
Atlanta
Economic activity grew modestly. Employment levels remained flat. Wages, costs, and prices rose moderately. Consumer spending and transportation activity expanded slightly. Residential real estate saw moderate growth and manufacturing was stable. Commercial real estate and lending rose at a modest pace. Energy activity grew moderately, and agriculture was mixed.
Chicago
Economic activity was flat on balance. Manufacturing demand rose modestly; employment was up slightly; consumer spending was flat on balance; construction and real estate activity and business spending declined slightly; and nonbusiness contacts saw no change in economic activity. Prices rose moderately, wages rose modestly, and financial conditions tightened modestly. Farm income expectations for 2026 were down slightly.
St. Louis
Economic activity has modestly increased. Employment was unchanged and wage growth remained moderate. Prices have risen at a robust pace and increases were widespread. Businesses expressed rising concerns about health-care costs. The outlook has remained unchanged.
Minneapolis
District economic activity increased slightly. Employment increased and wage pressures were modest. Prices increased moderately. Consumer spending fell slightly. Manufacturing activity increased moderately. Construction activity increased modestly, and commercial real estate was flat. Agricultural conditions were unchanged at low levels.
Kansas City
Business activity in the Tenth District continued to hold steady in a pattern of subdued conditions punctuated by pockets of strong demand. Rising diesel prices and shipping costs were a top concern, as both put more pressure on profit margins.
Dallas
Economic activity in the Eleventh District expanded moderately. Growth picked up notably in the manufacturing sector but eased in the banking and nonfinancial services sectors. Employment grew modestly and price growth was strong. Outlooks were mostly positive, though inflation and continued geopolitical and trade policy uncertainty remained headwinds.
San Francisco
Economic activity was broadly steady. Employers maintained staffing levels. Prices rose moderately, while wages increased only slightly. Retail sales softened somewhat, while demand for services varied by region and market segment. Conditions were mixed in manufacturing and stable in commercial real estate, but weakened slightly in agriculture, residential real estate, and financial services.
Note: This report was prepared at the Federal Reserve Bank of Philadelphia based on information collected on or before October 5, 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.