Fed underscores stable growth, higher inflationary pressures in US

Federal Reserve’s latest Beige Book paints a subdued picture of the US economy

The Federal Reserve said in a report released Wednesday that economic activity in the US has changed little in recent weeks, with consumer spending declining slightly and a slowdown in employment.

The Federal Reserve’s latest Beige Book explained that overall consumer spending, particularly on goods, has declined slightly recently.

However, it noted that electric vehicle (EV) sales supported spending in some regions, as consumers raced to take advantage of a federal tax credit that expired at the end of September.

The report, released about two weeks before monetary policy meetings, stated that manufacturing performance varied across regions, but most reports pointed out challenging conditions due to higher tariffs and weak overall demand.

In the financial and real estate sectors, the picture was mixed. Some regions witnessed an improvement in business lending, supported by lower interest rates, while activity in other regions remained weak.

The report indicated that the labor market remained generally stable, with hiring declining in most regions due to weak demand and increased companies' use of artificial intelligence technologies.

Regarding prices, the Fed explained that inflationary pressures continued to rise during the reporting period, with rising costs for imports and services such as insurance, healthcare, and technology.

The report indicated that increased tariffs raised production costs in most regions, but the transmission of these costs to final consumer prices varied across sectors.