Federal Reserve: U.S. Economic Activity Shows Little Change as Inflation Pressures Persist

The U.S. economy is experiencing a slowdown due to continued inflationary pressures. The Federal Reserve’s latest Beige Book report indicated little to no change in overall economic activity, placing policymakers under additional pressure as they consider the next interest rate move.

U.S. Economic Activity

The Beige Book, published by the Federal Reserve, revealed that economic activity in most parts of the country showed “little or no change” in recent weeks, based on surveys with regional business contacts.

According to the report released Wednesday, most of the Fed’s 12 districts reported either stable or slightly declining economic activity since the previous edition.

Respondents noted that consumer spending either fell or remained flat, as wages for many U.S. households failed to keep pace with rising prices.

The report also stated that 11 out of 12 districts saw little to no change in overall employment levels, with only one district reporting a slight decline.

Inflation and Price Pressures

On inflation, the report highlighted that all districts recorded varying degrees of price increases:

10 districts reported “moderate or slight” inflation.
Two districts reported strong growth in input costs.

The Fed noted that tariffs significantly drove prices higher. Several participants confirmed that tariffs directly impacted input costs, forcing companies to raise product prices partly to offset these additional costs.

Policy Challenges Ahead

These developments underscore the Federal Reserve’s difficult balancing act: restraining inflation while maintaining labor market strength. Recent data has shown an apparent slowdown in hiring, complicating the central bank’s decision-making on the future path of interest rates.

The latest Beige Book, prepared by the Philadelphia Fed and based on information collected up to August 25, included feedback and commentary from business leaders and economic stakeholders across the 12 districts.

The Fed is scheduled to meet on September 16–17 to decide on interest rates, as investors await clearer signals on the direction of upcoming monetary policy.

Summary:
The Beige Book points to slowing U.S. economic activity and persistent inflation pressures. The Fed faces a tough challenge of balancing price stability and supporting the labor market.

American Federal Reserve

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