Fed’s Beige Book Signals Flat U.S. Economic Momentum — Evening Brief – 10.15.25
U.S. economic activity “changed little” since early September, according to the Federal Reserve’s latest Beige Book released Wednesday, offering a snapshot of an economy that remains steady but subdued. The report—based on anecdotal feedback from the Fed’s 12 regional districts—depicts a holding pattern, with flat overall output, cooling labor demand, and stubbornly elevated cost pressures.
The report, which compiles data collected on or before October 6, found that three districts reported slight to moderate growth; five indicated no change, and four saw slight softening in overall activity. The summary—consistent with September’s “little or no change” narrative—suggests the U.S. economy continues to cool in a gradual and uneven fashion.
Employment remained largely stable across the country, though labor demand showed signs of waning, particularly in sectors affected by automation and AI-driven efficiencies.
“In most districts, more employers reported lowering head counts through layoffs and attrition, with contacts citing weaker demand, elevated economic uncertainty, and, in some cases, increased investment in artificial intelligence technologies,” the Fed said.
Wage growth, meanwhile, was moderate but steady, reflecting ongoing efforts by firms to balance cost control with employee retention in a still tight but cooling labor market.
Manufacturing conditions remained mixed but generally soft. Many districts cited tariff-related headwinds, elevated import costs, and slower orders from both domestic and international buyers. “Activity in agriculture, energy, and transportation was generally down among reporting districts,” the report said.
In financial services, conditions were uneven. A few districts noted modest improvements in business lending, while others saw flat or declining credit demand, particularly in residential and commercial real estate—sectors that remain highly sensitive to elevated interest rates.
Price pressures showed renewed strength in the latest survey. Several districts reported that input costs rose at a faster rate, driven by higher import prices, tariff-related expenses, and rising costs for insurance, health care, and technology services.
While some firms opted to absorb cost increases to preserve market share amid weakening demand, others—particularly in manufacturing and retail trade—fully passed higher costs to consumers.