As the CEO of your Chamber of Commerce, I often focus on equipping our business community with the clearest possible picture of the economic landscape. One of the most insightful tools we monitor is the Federal Reserve Bank's Beige Book.
Published eight times a year, The Beige Book compiles qualitative intelligence—real-world commentary and observations—gathered directly from businesses, community organizations, and economists across the 12 Federal Reserve Districts. Its purpose is to characterize regional economic conditions and identify emerging trends that may not yet be apparent in official government data, offering a vital complementary view of the economy.
The most recent report indicates the national economy is largely treading water, with overall economic activity having changed little on balance. Here are the three crucial messages for our members:
• Overall consumer spending is dipping, especially for retail goods, as lower- and middle-income households actively seek discounts in the face of persistent price increases. Conversely, spending by higher-income consumers, particularly on luxury travel and services, remains robust.
• The demand for labor is generally muted, and more employers are reducing head counts through layoffs or attrition. Notably, some contacts are explicitly citing increased investment in Artificial Intelligence (AI) technologies as a factor driving reduced employment needs.
• Prices continued their ascent. Firms are seeing faster growth in input costs, primarily driven by higher prices for services (like insurance and healthcare) and tariff-induced import costs. While some firms are absorbing these tariffs to preserve market share, many are beginning to pass these higher costs along to their customers.
The outlook remains a mixed bag of modest optimism and elevated uncertainty. A key downside risk cited in the report is the potential drag on growth from a prolonged government shutdown.
