Federal Reserve 'Beige Book': Manufacturing Activity Slightly Declines, Companies Remain Cautious in Hiring
On July 16 local time, the Federal Reserve released its economic conditions 'Beige Book'.
The 'Beige Book' shows that from late May to early July, economic activity increased slightly. Uncertainty remains high, leading businesses to continue being cautious.
Tourism activity fluctuated, manufacturing activity slightly declined, and non-financial services activity remained almost unchanged on average, but there were differences between regions. The economic outlook is neutral to slightly pessimistic.
Hiring overall remains cautious, with many attributing this to ongoing economic and policy uncertainties. An increasing number of regions have pointed out labor shortages in skilled trades. Employers in some areas have increased their investments in automation and artificial intelligence to reduce additional hiring demands.
Prices have risen across all regions. In all 12 districts, businesses have reported facing moderate to significant input cost pressures related to tariffs, particularly for raw materials used in manufacturing and construction. Many businesses have passed at least part of the rising costs onto consumers through price increases or surcharges. Professionals across various industries expect that cost pressures will continue to rise in the coming months, increasing the likelihood of faster consumer price increases starting at the end of summer.