The Federal Reserve’s Beige Book report, an updated assessment of regional economic prospects, has been released. The report notes that although economic activity across the country has remained largely stable, regional disparities are clear.
The Fed said economic activity in most regions did not change significantly compared to the previous report, but two regions saw slight contractions and one region saw a limited increase. Some observers said there was a growing risk of a slowdown in economic activity in the coming months, but there was also some optimism, particularly in manufacturing.
While the labor market remained sluggish, wage increases were generally moderate. Employment has declined slightly recently, with nearly half of regions reporting weak demand for labor, according to the report.
A similar situation emerges in terms of pricing. The Beige Book reported that price increases continued at a modest level during the reporting period.
A notable trend is emerging in the way companies approach employee management. Despite the increase in layoff announcements, businesses in many regions are delaying hiring, filling vacancies without creating new jobs, and reducing headcount through natural attrition rather than relying on outright layoffs, according to the Fed report. This suggests that employers are pursuing a “prudent recruitment strategy” amid uncertainty.
*This is not investment advice.
