US economic activity grew moderately, but Fed district expectations diverged
The economy is never monolithic — even within a single country, different regions can breathe at different paces. Some districts feel steady growth, others pause in anticipation, and still others are already seeing signs of a slowdown. The Fed's Beige Book registers these fluctuations, showing that overall well-being is the sum of many local temperatures. Moderate growth is good news, but the divergence in expectations and uncertainty over fuel prices are reminders that the path to stability is still riddled with questions.
The report showed that economic activity increased at a slight or moderate pace in eleven of the twelve Federal Reserve districts from late May through June, while one district reported no change. Employment levels were largely unchanged in most regions. The economy is expected to continue growing in the coming months, but several districts noted elevated uncertainty about the outlook for fuel prices. The survey said that prices generally rose moderately – nine districts reported moderate price growth, two saw robust growth, and one saw slight growth.
Non labour costs rose in several sectors, including services, construction and manufacturing, partly driven by higher energy, transportation and raw material costs. The Beige Book noted that expectations for price growth in the coming months varied across districts.
Respondents in some districts expect inflation to continue at its current pace, while respondents in others expect inflation to slow, partly due to falling fuel prices. On the labour market, seven of the twelve districts reported little change. A few districts noted that companies have expanded their use of AI either in hiring and screening potential employees or to boost productivity.
The Beige Book – a summary of economic conditions based on information gathered from the 12 regional reserve banks – is published eight times a year. It is one of the key data sources for the Federal Open Market Committee (FOMC) when making monetary policy decisions. The latest report highlights the unevenness of regional expectations, which could point to diverging recovery paths after a period of high inflation.
As CCTV+ reports. Investors and analysts will scrutinise the data ahead of the next Fed meeting, where a decision on the future of interest rates may be taken.
