Fed Beige Book: Overall Economic Activity Little Changed, Uncertainty Rising or Weighing on Economy

BlockBeats News, October 16th, the Federal Reserve Beige Book pointed out that since the last report, overall economic activity has not changed much, with three regions reporting slight to moderate growth in economic activity, five regions reporting no change, and four regions reporting slight slowing in economic activity.

Overall consumer spending, especially on retail goods, has seen a slight decline in recent weeks, although strong demand for electric vehicles boosted car sales in some regions before the expiration of federal tax incentives at the end of September. During the period covered by the report, international tourist demand for leisure and hospitality services further declined, while domestic consumer demand remained basically unchanged. Nevertheless, spending by high-income groups on luxury travel and accommodation remained strong. Several reports emphasized that facing rising prices and increased economic uncertainty, low- to middle-income families continued to seek discounts and promotions. Manufacturing activity varied by region, with most reports noting challenging conditions due to higher tariffs and weakened overall demand.

Agricultural, energy, and transportation activities in the reporting regions generally declined. The situation in the financial services industry and other rate-sensitive sectors (such as residential and commercial real estate) was mixed; some reports indicated that corporate lending improved in recent weeks due to lower rates, while others continued to highlight subdued activity. The outlook for future economic growth varies by region and industry. Sentiment has improved in some regions, with some expecting increased demand in the next 6 to 12 months. However, many other regions continue to expect that rising uncertainty will drag down economic activity. One regional report emphasized the downside risks to economic growth posed by the long-term government shutdown. (FXStreet)