US economic activity increased slightly from late May through early July, according to the Federal Reserve Bank’s Beige Book, which was released Wednesday.
Five districts reported slight or modest economic gains, five had flat activity, and the remaining two districts reported modest declines in activity, the Beige Book said. This represented again over the previous report in which half of the districts reported at least slight declines in activity.
UNCERTAINTY ELEVATED
Uncertainty remained elevated, contributing to ongoing caution by businesses, the Beige Book said.
Non-auto consumer spending declined in most districts, softening slightly overall, the Beige Book said. Auto sales receded modestly on average after consumers rushed to buy vehicles earlier this year to avoid tariffs.
Tourism activity was mixed, manufacturing activity edged lower, and nonfinancial services activity was little changed on average but varied across districts, the Beige Book said.
Loan volume increased slightly in most districts, and construction activity slowed somewhat, constrained by rising costs in some districts, the Beige Book said. Home sales were flat or little changed in most districts, and nonresidential real estate activity was mostly steady.
Activity in the agriculture sector remained weak, the Beige Book said. Energy sector activity declined slightly, and transportation activity was mixed.
The outlook was neutral to slightly pessimistic, as only two districts expected activity to increase, and others foresaw flat or slightly weaker activity, the Beige Book said.
LABOR MARKETS
Employment increased very slightly overall, with one district reporting modest increases, six reporting slight increases, three no change and two noting slight declines, the Beige Book said. Hiring remained generally cautious, which many contacts attributed to ongoing economic and policy uncertainty.
Labor availability improved for many employers, with further reductions in turnover rates and increased job applications, the Beige Book said. A growing number of districts cited labor shortages in the skilled trades. Several districts also mentioned reduced availability of foreign-born job applicants, attributed to changes in immigration policy.
Employers in a few districts ramped up investments in automation and AI aimed at reducing the need for additional hiring, the Beige Book said. Wages increased modestly overall, extending recent trends, with reports that ranged from flat wages to moderate growth.
Although reports of layoffs were limited in all industries, they were somewhat more common among manufacturers, the Beige Book said. Looking ahead, many contacts expected to postpone major hiring and layoff decisions until uncertainty diminished.
PRICES
Prices increased across districts, with seven characterizing price growth as moderate and five characterizing it as modest, mostly similar to the previous report, THE Beige Book said.
Businesses reported modest to pronounced input cost pressures related to tariffs, especially for raw materials.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $229.17 per cwt to $238.88, compared with last week’s range of $224.82 to $233.02 per cwt. FOB dressed steers, and heifers went for $350.68 per cwt to $378.20, compared with $354.61 to $365.41.
The USDA choice cutout Wednesday was down $4.87 per cwt at $372.69 while select was off $4.67 at $357.91. The choice/select spread narrowed to $14.94 from $15.24 with 144 loads of fabricated product and 10 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $419.00 per cwt, and 50% beef was $255.33.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.30 to $1.45 a bushel over the Sep corn contract, which settled at $4.05 1/4, up $0.04.
The CME Feeder Cattle Index for the seven days ended Tuesday was $321.91 per cwt, up $0.81. This compares with Wednesday’s Aug contract settlement of $325.57, up $3.30.