Fed Beige Book: Most Regions Experienced Slight or Modest Growth

James Hyerczyk
Updated: May 29, 2024, 20:33 GMT+00:00

Key Points:

  • National economic activity expands modestly, with growth varying across industries and districts. Retail spending remains flat, with consumers showing greater price sensitivity.
  • Travel and tourism strengthen due to increased leisure and business travel, though hospitality outlooks for the summer are mixed. Manufacturing activity remains mostly flat.
  • Employment rises slightly overall, with modest job gains in eight districts. Labor availability improves, and wage growth is moderate, normalizing to pre-pandemic levels.
Federal Reserve

National Economic Activity

National economic activity expanded from early April to mid-May, although growth varied across industries and districts. Most regions experienced slight or modest growth, while two saw no change. Retail spending was mostly flat, with consumers exhibiting greater price sensitivity and reduced discretionary spending. Auto sales remained stable, with some manufacturers introducing incentives to boost sales. Travel and tourism showed strength due to increased leisure and business travel, though hospitality outlooks for summer were mixed.

Industry Performance

Demand for nonfinancial services grew, with mixed results in transportation; port and rail activity rose, while trucking and freight demand varied. Nonprofits and community organizations continued to see solid demand for services. Manufacturing activity ranged from flat to slightly up, with two districts noting declines. Lending growth was constrained by tight credit standards and high interest rates. Housing demand increased modestly, spurring single-family construction despite rising rates impacting sales. The commercial real estate sector softened due to supply concerns, tight credit, and elevated borrowing costs. Energy activity remained stable, while agricultural reports were mixed, with eased drought conditions but persistent concerns over farm finances and incomes. Overall outlooks grew more pessimistic due to rising uncertainty and downside risks.

Labor Markets

Employment rose slightly overall. Eight districts reported modest job gains, while four reported no changes. Labor availability improved, though shortages persisted in certain sectors. Employee turnover decreased, with employers gaining more bargaining power. Hiring plans were mixed; some districts expected continued modest job gains, while others anticipated reduced hiring due to weaker business demand and economic uncertainty. Wage growth was moderate, with some districts noting normalization to pre-pandemic levels.


Prices increased modestly. Many districts reported consumer resistance to price hikes, leading to narrower profit margins as input costs rose. Retailers offered discounts to attract customers. Input costs, particularly insurance, continued to rise, though some construction material costs declined. Manufacturing raw material costs also saw decreases. Modest price growth is expected to persist in the near term.

Market Forecast

Given the mixed signals across various sectors and the constraints imposed by high interest rates and tight credit, the market outlook leans bearish. Increased uncertainty and potential downside risks further support this cautious stance. Traders should prepare for potential volatility and consider risk mitigation strategies in the short term.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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