US Economy Expands Modestly Amid Price Pressures

The US economy expanded at a modest pace through late August, driven by data center construction and defense orders, according to the Federal Reserve's Beige Book. Ten of the central bank's 12 regional districts reported slight to moderate growth, while two remained unchanged.

Manufacturing activity increased in most districts, with orders tied to national defense, artificial intelligence infrastructure, and new data center projects driving the rebound. The Cleveland district noted strong demand for manufactured goods, primarily fueled by data center and defense spending. In contrast, the New York district reported that highly skilled technical workers, especially artificial intelligence engineers, remained difficult to recruit.

However, AI adoption also weakened demand for entry-level positions in technology and administrative support, according to an employment agency. Labor demand was uneven across industries, with manufacturing, construction, and some service sectors showing healthy demand for workers, while retail and hospitality saw declines.