The Federal Reserve’s latest Beige Book, a collection of economic information collected by each Federal Reserve District up to Nov. 17, paints a picture of a slowing U.S. economy, with consumers displaying increasing price sensitivity.
The report also highlighted a diminishing economic outlook for the next six to 12 months, reflecting growing uncertainty and concerns about future economic conditions.
Consumers Become Price Sensitive
Consumers appear to be more sensitive to prices, affecting their purchasing decisions, the latest Fed Beige Book report revealed.
Retail sales, including the auto sector, showed mixed results.
There was a notable decline in the purchase of discretionary items and durable goods such as furniture and appliances. This trend underscores a growing price sensitivity among consumers, a shift that could have significant implications for retailers, especially with the holiday season approaching.
In contrast, travel and tourism activities remained generally healthy, indicating some resilience in this sector. However, the demand for transportation services was sluggish, reflecting ongoing challenges in this industry.
Consumer credit remains relatively healthy, but there is an uptick in consumer delinquencies, a potential red flag.
The demand for labor is cooling, with most districts reporting flat to modest increases in overall employment. However, several districts continued to describe labor markets as tight, particularly for skilled workers who remain in short supply.
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Manufacturing Activity And Business Outlooks Vary
Manufacturing activity exhibited a mixed performance, with manufacturers’ outlooks weakening in some areas.
The demand for business loans decreased slightly, particularly for real estate loans, suggesting caution among businesses in taking on new debt.
Agriculture conditions remained steady to slightly improved, with farmers benefiting from higher selling prices, although yields were mixed.
Commercial real estate activity continues its downward trajectory, with particular weakness in the office segment and a softening in multifamily activity.
Additionally, there was a slight decrease in residential sales, leading to higher inventories of available…
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