Fed Report: Economic Activity Edges Up, Prices Rise Moderately
The Federal Reserve's latest Beige Book report shows that economic activity in the US has increased modestly since early July, with employment rising slightly overall. Ten out of twelve Federal Reserve Districts reported growth in the slight to moderate range, while two districts saw no change. Consumer spending grew slightly on balance, but was dampened by high fuel prices and rising financing costs.
Auto sales were subdued, but tourism activity increased, particularly in the airlines sector, where demand was strong despite higher airfares. Manufacturing activity picked up across most districts, driven by ongoing strength in defense and data center-related orders. Services firms reported slight to modest increases in activity, while financial conditions improved slightly.
The Fed's report notes that sentiment is mixed across sectors, with contacts reporting heightened uncertainty surrounding the effects of higher energy prices, policy, and international conflict. The outlook for the coming months was positive, but uncertain.