US economy on brink of recession, tariffs exacerbate inflation: Fed

US economic activity saw “little or no change” across most of the country in recent weeks, the Federal Reserve said in its Beige Book survey of regional business contacts.

“Most of the twelve Federal Reserve districts reported little or no change in economic activity since the prior Beige Book period,” according to the report published Wednesday. “Across districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices.”

The Fed observed price increases in all regions, with ten reporting "moderate or modest" inflation, while two saw stronger increases in input costs amid a significant impact on tariffs.

On the employment front, 11 regions reported little change in employment levels, while only one region indicated a modest decline.

The report comes ahead of the Federal Open Market Committee's September 16-17 meeting, where Fed officials will weigh inflationary pressures from tariffs against signs of a slowing labor market.