Fed Beige Book: Business Leaders Express Optimism About Rising Demand in the Coming Months

Forex - The Federal Reserve (Fed) stated in its final regional economic commentary of the year that economic activity has shown a slight increase in most areas of the country in recent weeks. According to the Fed's Beige Book survey, the small improvements in the economy were accompanied by moderate growth expectations that improved across most regions and sectors. The report noted, "While the growth in economic activity is generally small, growth expectations showed a moderate increase in most geographies and sectors. Business representatives expressed optimism that demand will increase in the coming months. Consumer spending has remained generally steady."

The survey is published eight times a year and includes perspectives from each of the Fed's 12 districts. According to the Beige Book report, in the labor market, employment levels were steady or slightly higher in most of the U.S., with some firms increasing their workforce, although worker turnover remained low. The Fed stated that wage growth has softened to a more modest pace in most regions.

The report also included some more pronounced cautionary notes. Many consumer-facing businesses indicated that shoppers have become more sensitive to prices. Weakness in the housing market was reflected in decreased spending on home furnishings and a decline in demand for mortgage loans.

On the other hand, the Fed reported that the technology sector's construction of data centers has led to strong electricity demand, and tourism has remained robust in some regions. Overall, while the central bank continues to control inflation, prices increased at a modest pace in most areas. Some regions reported declines in raw material and other non-labor input costs.