Fed’s Beige Book Finds Softening Job Market

Group 1: Job Market Insights - The job market has shown signs of weakening, with some employers reducing hiring plans, cutting hours, or shedding jobs [1][3][5] - Approximately half of the Federal Reserve's 12 districts reported weaker demand for workers, with many businesses opting for hiring freezes and attrition rather than layoffs [3][5][6] - The report indicates that employment declined slightly as of mid-November, contrasting with the addition of about 119,000 jobs in September [2][3] Group 2: Consumer Spending Trends - Consumer spending has softened, particularly among middle-income households, while higher-income households continue to spend [8][9] - The Kansas City Fed district noted a visible slowdown in foot traffic at retailers and restaurants due to the government shutdown [8] - A recent survey indicated that consumer confidence has fallen to its lowest levels since April, highlighting a "K-shaped economy" where spending patterns diverge based on income levels [9] Group 3: Price Pressures and Inflation - Prices have risen moderately, with tariffs contributing to widespread input cost pressures among manufacturers and retailers [10][11] - The extent to which higher input costs are passed on to consumers varies, influenced by demand and competitive pressures [10][11] - Fed contacts anticipate ongoing upward cost pressures, but plans to raise prices in the near term are mixed [12]