National Summary
Overall Economic Activity
National economic activity continued to expand from early April to mid-May; however, conditions varied across industries and Districts. Most Districts reported slight or modest growth, while two noted no change in activity. Retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers. Auto sales were roughly flat, with a few Districts noting that manufacturers were offering incentives to spur sales. Travel and tourism strengthened across much of the country, boosted by increased leisure and business travel, but hospitality contacts were mixed in their outlooks for the summer season. Demand for nonfinancial services rose, and activity in transportation services was mixed, as port and rail activity increased whereas reports of trucking and freight demand varied. Nonprofits and community organizations cited continued solid demand for their services, and manufacturing activity was widely characterized as flat to up, though two Districts cited declines. Tight credit standards and high interest rates continued to constrain lending growth. Housing demand rose modestly, and single-family construction increased, though there were reports of rising rates impacting sales activity. Conditions in the commercial real estate sector softened amid supply concerns, tight credit conditions, and elevated borrowing costs. Energy activity was largely stable, whereas agricultural reports were mixed, as drought conditions eased in some Districts, but farm finances/incomes remained a concern. Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks.
Labor Markets
Employment rose at a slight pace overall. Eight Districts reported negligible to modest job gains, and the remaining four Districts reported no changes in employment. A majority of Districts noted better labor availability, though some shortages remained in select industries or areas. Multiple Districts said employee turnover has decreased, and one noted that employers' bargaining power has increased. Hiring plans were mixed—a couple of Districts expect a continuation of modest job gains, while others noted a pullback in hiring expectations amid weaker business demand and reluctance due to the uncertain economic environment. Wage growth remained mostly moderate, though some Districts reported more modest increases. Several Districts reported that wage growth was at pre-pandemic historical averages or was normalizing toward those rates.
Prices
Prices increased at a modest pace over the reporting period. Contacts in most Districts noted consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average. Retail contacts reported offering discounts to entice customers. Many Districts observed a continued increase in input costs, particularly insurance, while some noted price declines in certain construction materials. Some Districts observed declines in manufacturing raw material costs. Price growth is expected to continue at a modest pace in the near term.
Highlights by Federal Reserve District
Boston
Economic activity was about flat on balance. Prices increased modestly, and wage growth was slow-to-moderate amid stable employment levels. Real estate activity, for both commercial and residential properties, weakened slightly after showing signs of improvement earlier in the year. The outlook became more uncertain for some contacts but remained cautiously optimistic overall.
New York
On balance, regional economic activity grew slightly. Labor market conditions remained solid, and labor demand and labor supply continued to come into better balance. Consumer spending picked up slightly after slow sales in the spring. Housing markets remained solid, though low inventory continued to restrain sales. Selling price increases remained modest.
Philadelphia
Business activity grew slightly in the current Beige Book period, up from no change last period. Employment edged up slightly, owing to increased demand and supply of labor. Wage and firm price inflation were up modestly. Existing home sales grew slightly, and new-home sales held steady at high levels. Expectations for future growth edged down and were less widespread for nonmanufacturers but remained positive overall.
Cleveland
District business activity increased slightly but somewhat more slowly than it had in the prior reporting period. Some contacts attributed the slowdown to interest rates staying higher for longer than anticipated. Consumer spending declined modestly, which some manufacturers said dampened demand for their goods. The majority of contacts indicated that wages, input costs, and selling prices continued to stabilize in recent weeks.
Richmond
Economic activity in the region expanded modestly this period. Consumer spending rose moderately, overall, which was driven by individuals with discretionary income as lower income individuals pulled back or traded down to lower priced goods. Import activity increased and the port of Baltimore was able to reopen one channel into the port. Manufacturing and nonfinancial services firms reported no change in demand in recent weeks.
Atlanta
The Sixth District economy grew slightly. Labor markets continued to stabilize; wage pressures eased. Growth of some nonlabor costs slowed. Consumer demand was generally healthy. Tourism remained strong. Commercial real estate conditions were mixed. Transportation activity varied. Loan demand was flat. Energy activity was robust. Agricultural conditions softened.
Chicago
Economic activity increased slightly. Employment and construction and real estate activity increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw little change in activity; and manufacturing activity edged down. Prices and wages rose moderately, while financial conditions tightened a bit. Prospects for 2024 farm income increased slightly.
St. Louis
Economic activity across the Eighth District continued to increase slightly since our previous report. The outlook among contacts was slightly pessimistic, which is weaker than our previous report but better than one year ago.
Minneapolis
District economic activity grew slightly. Employment grew but labor demand softened. Wage pressures were present but eased, while prices ticked up. Consumer spending rose but contacts were cautious, and manufacturing rose slightly. Commercial and residential construction improved slightly, and home sales grew strongly. Agricultural conditions remained weak but saw some positive developments.
Kansas City
The Tenth District economy expanded at a moderate pace. Household spending rose moderately, driven by increases in hotel stays, outings to restaurants, and auto maintenance. Job gains were modest, yet contacts indicated their employment outlooks were less vulnerable to a deterioration in conditions compared to six months ago. Prices grew slightly with broad reports that strategies regarding price changes were shifting.
Dallas
Economic activity was flat to up slightly over the reporting period. Some growth was seen in the manufacturing, banking, and energy sectors, while activity in nonfinancial services was flat, and declines were seen in retail sales. Employment levels held mostly steady overall, according to contacts. Outlooks were generally stable to slightly more pessimistic compared with the prior reporting period.
San Francisco
Economic activity and employment levels were largely unchanged. Prices, wages, and retail sales grew slightly. Activity in services sectors and residential real estate markets weakened a bit. Commercial real estate activity and financial sector conditions were largely unchanged. Demand for manufactured products picked up slightly, and conditions in agriculture were mixed.
Note: This report was prepared at the Federal Reserve Bank of Dallas based on information collected on or before May 20, 2024. This document summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.