Fed Beige Book: Economic activity has changed 'little' since November

The US Federal Reserve (Fed) reported that there has been little or no change in economic activity in most regions since November. The report stated that strong consumer spending has supported the US economy in recent weeks. The Fed published the January issue of the "Beige Book" report, which includes assessments of the current state of the American economy. The report, prepared with analyses from 12 branches of the bank, stated that there has been little or no change in economic activity in most regions since the previous report was published in November. The report noted that three of the four regions reporting differences experienced moderate growth in economic activity and one experienced a moderate decline, and stated that consumers experienced some seasonal relief during the holiday season. The report indicated that seasonal demand increased air transportation volumes, and that leisure travel increased in some regions. The report noted that manufacturing activities decreased in almost all regions, and that high interest rates continued to limit automobile sales and real estate deals. The report stated, "The possibility of falling interest rates was cited as a source of optimism in various sectors." On the other hand, concerns about the office market, weakening overall demand and the 2024 political cycle are frequently cited as sources of economic uncertainty, and the report noted that in general, firms in most regions have positive or improved future growth expectations. Wage pressures expected to ease The report noted that almost all regions showed one or more signs of a cooling labor market, and that firms in many regions expect wage pressures to ease and wage increases to fall further next year. The report noted that there were slight or moderate price increases in six regions and moderate price increases in two regions, while overall price increases in five regions decreased to some extent compared to the previous period, and there was no significant change in price pressures in the other three regions. The report explained that increased consumer price sensitivity is forcing retailers to tighten their profit margins and their suppliers to withdraw their efforts to increase prices.