On Wednesday, the Federal Reserve reported in its latest Beige Book that after several months of almost no change, economic activity in the usa slightly increased in November. Although the overall growth in economic activity was minimal, expectations of growth in most regions and industries rose moderately. Businesses showed higher optimism about future demand, while overall consumer spending remained stable. Employment levels were flat or only slightly increased.

The recent Beige Book report from the Federal Reserve depicts a more dismal state of the usa economy than official statistics, showing that economic growth is flat, recruitment rates are declining, and prices are rising slightly. In many cases, this contradicts economic data which indicates that economic activity in the usa remains strong, consumer spending is robust, and unemployment rates are relatively low.

Reports from the various Federal Reserve districts indicate that inflation has only risen slightly, as consumers become more sensitive to prices, limiting the ability of businesses to pass on rising costs to consumers.

In terms of the labor market, hiring activity is considered to be relatively subdued due to low employee turnover, though layoffs have also been limited. Business people expect employment to increase steadily or slightly. Surveys show that wage growth in most regions has slowed to a moderate level, and this is expected to continue in the coming months.

The Beige Book report includes anecdotal evidence and comments on economic conditions from businesses and other contacts across the Federal Reserve's 12 districts. The Beige Book and a series of economic data from the usa will help influence the debate among Federal Reserve policymakers at their meetings on December 17-18, when they will decide whether to cut interest rates for the third time.

This Beige Book was compiled by the Kansas City Federal Reserve, based on information collected up to November 22, after the usa presidential election had concluded. Overall, the report reflects a cautiously optimistic sentiment regarding economic activity in the usa. Despite moderate economic growth and controlled inflation, price sensitivity, employment challenges, and regional issues remain ongoing concerns.

Key points from the reports of the regional Federal Reserves.

The following are the key points from the reports of various regional Federal Reserves:

Boston: The warm autumn weather has led to a significant decline in winter commodity and snow vehicle sales.

New York: Uncertainty regarding the presidential election has temporarily delayed hiring decisions, but businesses expect improvements.

Philadelphia: The manufacturing sector is optimistic about future orders and shipment growth, but capital expenditure plans remain unchanged.

Cleveland: Retailers are responding to weak demand and consumer sensitivity to prices through promotions.

Richmond: Hurricane Helen has severely impacted the real estate market in North Carolina, with residential sales declining by 25%-35% in some areas.

Atlanta: Rising mortgage rates and weather events have caused a decline in housing demand, especially with oversupply in certain areas of Florida.

Chicago: Due to tariff concerns, retailers have increased inventory buildup, with some businesses replacing imported electronics early.

St. Louis: The auto industry has increased shifts due to production delays caused by earlier hurricanes, but electric vehicle manufacturing has laid off workers due to weak demand.

Minneapolis: The agricultural situation remains weak, with 85% of respondents reporting a decline in farm income, primarily due to low commodity prices and high operation costs.

Kansas City: The demand for wind power from datacenters is driving growth in generation capacity, but challenges such as permitting delays, high equipment costs, and labor shortages hinder infrastructure expansion.

Dallas: Falling oil price expectations may lead to reduced capital expenditures in 2025, but the suspension of liquefied henry hub natural gas export permits may soon end, providing opportunities for related infrastructure investment.

San Francisco: Labor mobility is stabilizing but still lower than during the pandemic peak. Businesses face challenges with employee retention and mismatches between job seekers' skills and job requirements.

Editor/Lambor