Beige Book Shows Uneven Growth as Energy Costs Intensify Price Pressures — Evening Brief – 10.14.26
The U.S. economy is growing only slowly as businesses contend with rising energy costs, tariffs and persistent uncertainty. The Federal Reserve’s latest Beige Book points to an economy where manufacturing remains a bright spot, spending is increasingly driven by wealthier households, and inflation pressures are building.
Two of the Fed’s 12 districts reported moderate growth in economic activity since the prior report, three reported modest growth, four saw slight growth and three reported no significant change.
Manufacturing led the way. The Dallas district reported robust, broad-based factory growth, while six others saw modest to moderate gains. Other sectors showed little growth overall.
Consumer spending was largely flat in most districts, and auto sales were flat to modestly lower in five of the six districts that reported. More than half the districts said spending was driven by high-income households. Tourism grew, though firms in the Boston, Minneapolis and San Francisco districts reported fewer sales to Canadian visitors.
Labor markets were little changed. Labor supply was generally adequate, but shortages persisted for specialized, technical and skilled trade workers. Five districts said some firms reduced staffing through attrition, delayed hiring or expected less job creation after adopting AI to boost productivity. Inflation also drove demands for cost-of-living raises, and Boston staffing contacts said workers sought new jobs as wage increases lagged inflation.
Price growth was robust in three districts and moderate in eight, with four reporting that price increases had accelerated. Higher oil prices appeared in every district report, with fuel surcharges passing costs through supply chains. Consumer-facing firms reported tighter margins as price-sensitive customers resisted increases.
Most firms remained positive about the coming months, though they expect only slight growth and further price increases as contracts come up for renewal.