The Federal Reserve Bank’s Beige Book Wednesday reported overall economic activity increased at a slight to moderate pace in seven of the twelve Federal Reserve districts during the last reporting period.
Conversely, the number of districts reporting flat or declining activity increased from four in the prior period to five in the current period.
CONSUMER SPENDING UP SLIGHTLY
Although consumer spending increased slightly on balance, two districts reported ongoing declines, and many noted that sales were dampened by economic uncertainty, increased price sensitivity and lower-income consumers pulling back, the Beige Book reported.
Districts affected by winter storms said retail traffic generally slowed, and one district said immigration enforcement activity affected customer demand negatively in urban areas, the Beige Book said.
Auto sales were mostly down for districts that reported on them, with many citing continuing affordability issues, the Beige Book said.
Manufacturing activity improved overall since the previous reporting period, with eight districts reporting varying degrees of growth and two reporting declines, the Beige Book said. Manufacturing contacts in many districts reported increases in new orders, and several cited boosts in demand from data centers and, relatedly, energy infrastructure.
Transportation activity was mixed across districts that reported on it, with three reporting contractions and two reporting modest growth, the Beige Book said. Overall, financial services activity was reported as stable to up, with commercial lending being the primary area of strength.
For most districts that reported on residential real estate and construction, sales and activity decreased slightly, with low inventories and affordability remaining key issues, the Beige Book said. Nonresidential construction activity was mixed across reporting districts but increased slightly on net.
Among reporting districts, agricultural conditions were mostly flat, and energy activity grew modestly on balance, the Beige Book said.
Overall, economic expectations were optimistic, with most districts expecting slight to moderate growth in coming months, the Federal Reserve said.
LABOR MARKETS
Employment levels were generally stable in recent weeks as seven of the twelve districts reported no change in hiring, the Beige Book said. Contacts in several districts cited rising nonlabor input costs, softer demand or uncertainty about overall economic conditions as reasons for flat or lower employment levels.
Firms in some districts and in various sectors looked to AI or other forms of automation to gain efficiencies, with most emphasizing the goal of productivity enhancement rather than worker replacement, the Beige Book said.
Wages rose at a modest or moderate pace in most districts as firms competed for talent in select areas, including the skilled trades, the Beige Book said. Several districts continued to report a push on total compensation from rising health insurance premiums.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $244.74 per cwt to $249.00, compared with last week’s range of $247.79 to $251.69 per cwt. FOB dressed steers and heifers went for $382.75 per cwt to $389.66, compared with $387.65 to $391.91.
The USDA choice cutout Wednesday was up $0.52 per cwt at $388.57 while select was up $1.77 at $380.35. The choice/select spread narrowed to $8.22 from $9.47 with 73 loads of fabricated product and 20 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $433.26 per cwt, and 50% beef was $159.00.
The USDA said basis bids for corn from feeders in the Southern Plains were $0.90 to $1.05 a bushel over the May corn contract, which settled at $4.43 3/4, down $0.02 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $368.93 per cwt, down $0.66. This compares with Wednesday’s Mar contract settlement of $363.92, up $6.72.