Fed Beige Book: Economic activity rises slightly

The Fed's Beige Book report stated that the economy has grown moderately since the beginning of the year, while consumers' sensitivity to rising prices has increased. The Fed published the February issue of the "Beige Book" report, which includes assessments of the current situation in the American economy. The report, prepared with analyses from 12 branches of the bank, stated that economic activity has "slightly increased" in a balanced manner since the beginning of January. The report noted that consumer spending, especially on retail products, has decreased in recent weeks, while some analyses mentioned that consumers' price sensitivity has increased and that household spending continues to move away from discretionary goods. The report emphasized that activity in the manufacturing sector has not changed significantly and that supply bottlenecks have become more normal. The report noted that the ongoing disruptions in the Red Sea and the Panama Canal have generally not had a significant impact on businesses, but it was reported that some reported that pressure on international shipping costs has increased. The report noted that demand for residential real estate has increased in recent weeks, largely due to a softening in mortgage interest rates, but limited housing stock has hindered sales. The Fed's report noted that while there were analyses indicating strong demand for new data centers, industrial and manufacturing spaces, and large infrastructure projects, commercial real estate activity was weak, especially for offices. The report reported that credit demand was on a downward trend and credit quality was generally healthy despite increasing default reports, and that the outlook for future economic growth remained generally positive. The report, which also included assessments of the labor market, reported that employment was increasing at a "slight to moderate" pace in most regions. The report noted that the tightness in the labor market was easing further in general, and that employees' expectations for wage adjustments were more in line with historical averages. The report noted that price pressures continued, but inflation eased somewhat in some regions. It also noted that businesses were having difficulty passing on higher costs to customers who were increasingly sensitive to price changes, and that the cost of many manufacturing and construction inputs, such as steel, cement, paper and fuel, had fallen in recent weeks.