Economic Activity - Economic activity maintained a slight to modest pace of growth across most Federal Reserve Districts, with seven Districts reporting increases and five noting flat or declining activity[25] - Consumer spending showed little change, with reports of price-sensitive consumers purchasing fewer items and retailers discounting products[16] - Residential real estate activity increased due to improved supply, while commercial real estate remained flat amid concerns about office leasing[28] Labor Markets - Employment rose slightly overall, with most Districts reporting flat or modest growth, although some sectors, particularly manufacturing, experienced declines[26] - Wage growth continued at a moderate pace, but several Districts noted a slowdown in wage increases due to increased worker availability and reduced competition[26] - Labor turnover decreased, leading to less demand for new hires, with firms becoming more selective in hiring practices[26] Prices and Inflation - Prices increased at a modest pace, with input costs stabilizing in most Districts, although some areas reported notable increases in specific commodities like copper[16] - Selling prices continued to rise modestly, but consumers pushed back against high prices by purchasing less or opting for lower-priced alternatives[42] - Overall, inflation pressures remained moderate, with some sectors experiencing price competition as consumers sought lower prices[100] Consumer Behavior - Retailers reported slight decreases in real sales, with many consumers becoming more price-conscious and opting for discounts[34] - Auto sales varied across Districts, with some declines attributed to a cyberattack on dealerships and high interest rates affecting affordability[35] - Tourism activity remained steady, with pockets of growth in certain areas, although price sensitivity among tourists dampened sales in hospitality[37] Outlook - Expectations for economic growth over the next six months are cautious, influenced by uncertainties related to the upcoming election, domestic policy, and inflation[25] - Contacts across various sectors expressed concerns about future demand, particularly in manufacturing and commercial real estate, with some anticipating declines[28]

Economic Overview - The federal funds rate target range is maintained at 5.25% to 5.50%, reflecting a balance of risks to employment and inflation[3] - The unemployment rate was at a historically low level of 4.0% in May 2024, with significant employment gains across various sectors[43] - Real GDP growth moderated in the first quarter of 2024, primarily due to declines in net exports and inventory investment[58] Inflation Trends - The 12-month change in housing services prices decreased from over 8% in May 2023 to 5.5% in May 2024, indicating easing inflation[35] - Core goods prices saw a decline of 1.1% over the 12 months ending in May 2024, reflecting improvements in supply-demand imbalances[14] - The PCE price index for food prices slowed from a peak of 12.2% in August 2022 to just 1.2% in May 2024[13] Labor Market Dynamics - Payroll employment gains averaged 248,000 per month in the first five months of 2024, with over 60% of industries expanding their employment[68] - Nominal wage growth remains above levels consistent with 2% inflation, although it has slowed recently[56] - Employment disparities across demographic groups have narrowed, but significant gaps remain, particularly for prime-age women and minority groups[52] Financial Stability - The financial system is reported to be sound, with the credit-to-GDP ratio near a two-decade low, although vulnerabilities are emerging in asset markets and commercial real estate[58] - Delinquency rates for small business loans and credit cards have increased, indicating potential stress in the financial sector[58]