Fed: Some retailers see negative impact from government shutdown on consumers

Economic Activity - Economic activity showed little change overall, with two districts experiencing modest declines in growth while one reported overall growth [1] - Consumer spending continued to decline, although high-end retail remained resilient despite some negative impacts from the government shutdown [1] Manufacturing and Employment - Manufacturing saw a slight increase, but faced headwinds from tariffs and tariff uncertainty [2] - Employment declined slightly, with half of the districts reporting weaker labor demand, primarily due to hiring freezes and attrition rather than layoffs [3][4] Food Assistance and Community Impact - Increased demand for food assistance was noted, attributed to disruptions in SNAP benefits, marking a significant concern for community organizations [3] - The impact of the government shutdown on food assistance was highlighted, suggesting a potential one-time spike in demand [7] Labor Market and Wages - The labor market grew at a modest pace, with rising health insurance premiums exerting upward pressure on labor costs [5] - AI technology has replaced some entry-level positions and increased productivity, allowing businesses to curb new hiring [5] Input Costs and Inflation - Input costs rose modestly across manufacturing and retail sectors, largely due to tariffs, leading to margin compression for many companies [6][7] - Companies are facing financial strains from tariffs, with mixed plans to raise prices in response to ongoing cost pressures [7]