The Beige Book showed economic activity was "little changed in nearly all Districts" compared to August's report which had three Districts showing growth and nine showing flat/declining activity.
- Employment growth moderated further, with hiring now "focused primarily on replacement rather than growth" compared to August's steady levels
- Manufacturing weakness became more widespread, with "most Districts" now reporting declines
- Consumer spending shifted from "ticking down" to "mixed," with consumers increasingly seeking less expensive alternatives
- Housing activity showed resilience despite affordability challenges, with inventory expanding and prices generally holding steady or rising slightly
- Banking sector stabilized somewhat, with "generally steady to up slightly" activity versus previous weakness
Inflation Trends:
- Price increases continued moderating, with most Districts reporting slight to modest increases
- Wage growth remained modest to moderate but showed further signs of cooling
- Multiple Districts noted profit margin compression as input costs rose faster than selling prices
If anecdotal reports are at the front end of economic forecasting --as many at the Fed believe -- then the comments in the Beige Book should soon start trickling into economic data. The market is on a sugar high from the Fed cuts and the sense of a Fed put but the soft landing scenario isn't assured.
