Federal Reserve Beige Book shows rising input price pressures

The Federal Reserve’s latest Beige Book reveals a complex economic landscape characterized by steady growth in most regions but stagnant employment and rising costs. Ten of the twelve Federal Reserve districts reported economic growth ranging from slight to moderate, though employment levels remained largely unchanged across most jurisdictions.

Price pressures are a growing concern, with three districts reporting strong overall price growth and eight others noting moderate increases. Specifically, three districts highlighted that input price pressures are intensifying, driven by rising costs in energy, transportation, and raw materials such as metals and petrochemicals.

Consumer spending has shown less momentum. Most districts reported little to no change in spending, with high-income households serving as a primary driver in more than half of the surveyed areas. While some regions like New York saw slight increases in spending, auto sales were described as flat to modestly lower in several districts. This spending behavior persists despite declining consumer confidence and shrinking financial cushions among households.