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Most districts reported slight or modest growth but two noted no change in activity, the Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said.
The report described retail spending as flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers.
Contacts in most districts noted consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average.
Retail contacts reported offering discounts to entice customers. Reports of trucking and freight demand varied.
Manufacturing activity was widely characterised as flat to up, though two Fed districts cited declines. Some districts observed declines in manufacturing raw material costs. Price growth is expected to continue at a modest pace in the near term.
Tight credit standards and high interest rates continued to constrain lending growth.
Conditions in the commercial real estate sector softened amid supply concerns, tight credit conditions and elevated borrowing costs.
Energy activity was largely stable, whereas agricultural reports were mixed, as drought conditions eased in some districts, but farm finances and incomes remained a concern.
Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks.
Employment rose at a slight pace overall. Eight Fed districts reported negligible to modest job gains, and the remaining four reported no changes in employment. A majority of districts noted better labour availability, though some shortages remained in select industries or areas.
Multiple districts said employee turnover has decreased, and one noted that employers' bargaining power has increased.
Hiring plans were mixed—a couple of Districts expect a continuation of modest job gains, while others noted a pullback in hiring expectations amid weaker business demand and reluctance due to the uncertain economic environment.
Wage growth remained mostly moderate, though some districts reported more modest increases. Several districts reported that wage growth was at pre-pandemic historical averages or was normalising toward those rates.
Fibre2Fashion News Desk (DS)