National Summary - Economic activity was little changed in nearly all Districts since early September, with two Districts reporting modest growth [8] - Manufacturing activity declined in most Districts, while banking sector activity was steady to slightly up [8] - Consumer spending showed mixed results, with some shifts towards less expensive alternatives [8] - Housing market activity remained stable, with inventory expanding and home values holding steady or rising slightly [8] - Commercial real estate markets were generally flat, with some activity boosted by data center and infrastructure projects [8] - Agricultural activity was flat to down modestly, with some crop prices remaining unprofitably low [8] - Energy activity was unchanged or down modestly, with lower energy prices compressing producers' margins [8] Labor Markets - Employment increased slightly, with more than half of the Districts reporting slight or modest growth [9] - Demand for workers eased somewhat, focusing primarily on replacement rather than growth [9] - Worker availability improved, but finding workers with specific skills remained challenging in sectors like technology and manufacturing [9] - Wages generally rose at a modest to moderate pace, with some slowdown in wage increases noted [9] Prices - Inflation moderated, with selling prices increasing at a slight or modest pace in most Districts [10] - Prices for some food products, such as eggs and dairy, increased more sharply [10] - Input prices generally rose moderately, with rising insurance and healthcare costs noted as acute pressures [10] Highlights by Federal Reserve District - **Boston**: Economic activity was flat, with international travel as a bright spot; home sales and prices softened [11] - **New York**: Regional economic activity was little changed, with solid housing markets and strong capital spending plans [12] - **Philadelphia**: Business activity declined slightly, but expectations for future growth rose among manufacturers and non-manufacturers [13] - **Cleveland**: Business activity was stable, with increased residential construction and strong demand for nonfinancial services [14] - **Richmond**: The regional economy grew modestly, with increased consumer spending and loan demand [15] - **Atlanta**: The economy declined slightly, with steady employment and slow wage growth [16] - **Chicago**: Economic activity increased slightly, with modest rises in consumer spending and employment [17] - **St. Louis**: Economic activity remained unchanged, with modest price increases and a slightly pessimistic outlook [18] - **Minneapolis**: Economic activity declined slightly, with flat consumer spending and moderate wage increases [19] - **Kansas City**: Economic activity was steady, with mild growth in consumer spending [20] - **Dallas**: Economic activity rose modestly, driven by nonfinancial services growth [21] - **San Francisco**: Economic activity was steady, with improved labor availability and stable prices [22] Sector-Specific Insights - **Retail and Tourism**: Slight growth in revenues reported, with strong summer tourism on Cape Cod and increased airline passenger traffic [26] - **Manufacturing**: Revenues down slightly, with weak demand reported; some firms expected stable or improving demand for the rest of 2024 [27] - **Commercial Real Estate**: Activity stable on average, with office leasing falling short of expectations [29] - **Residential Real Estate**: Home sales up modestly year-over-year, with rising inventories and cautious optimism for future sales [30]

Developments in Financial Markets and Open Market Operations - Nominal Treasury yields declined notably due to weaker-than-expected data releases and policy communications suggesting a reduction in policy restraint [1] - Broad equity prices finished modestly higher, while credit spreads remained narrow by historical standards, indicating compatibility with continued economic expansion [1] - A brief episode of elevated market volatility occurred in early August, driven by unwinding of speculative trading positions due to unrelated events [2] Policy Expectations - The market-implied policy rate path shifted down materially, with expectations of about 100 basis points of cuts through year-end, compared to around 50 basis points previously [3][5] - Most survey respondents expected a 25 basis point cut at the meeting, but the probability of a 50 basis point cut had increased [5] - Balance sheet expectations remained largely unchanged, with most respondents not concerned about an economic downturn in the near or medium term [5] International Developments - Many central banks in advanced foreign economies began or continued to lower policy rates, contributing to a modest decline in the trade-weighted U.S. dollar index [6] Economic Situation - Real GDP expanded solidly, with job gains moderating and the unemployment rate remaining low at 4.2 percent [11][13] - Consumer price inflation was 2.5 percent in July, with core PCE inflation at 2.6 percent, both measures well below their rates from a year ago [12] - Labor market conditions eased further, with average monthly nonfarm payroll gains lower than in the second quarter [13] Financial Situation - The market-implied path for the federal funds rate declined notably, with nominal Treasury yields decreasing significantly [18] - Broad stock price indexes increased despite a temporary drop in early August, and yield spreads on corporate bonds remained in the bottom quintile of historical distributions [19] - Credit remained accessible for most consumers, though credit growth showed signs of moderating [24][25] Staff Economic Outlook - The staff forecasted solid economic growth, with real GDP growth expected to rise in line with potential output growth from 2025 to 2027 [28] - Inflation forecasts were slightly lower, with total and core PCE price inflation expected to decline further, reaching 2 percent by 2026 [29] Participants' Views on Current Conditions - Participants noted that inflation remained somewhat elevated but expressed greater confidence that it was moving sustainably toward 2 percent [34][35] - Labor market conditions were observed to be less tight than before the pandemic, with a slowdown in payroll employment growth [36] - Economic activity continued to expand at a solid pace, with resilient consumption spending supported by rising real household incomes [38]