Fed's beige book: Economic activity little changed from previous report

Economic Activity & Consumer Spending - Economic activity showed little change from the prior report, with three districts reporting modest growth, five reporting no change, and five seeing a slight softening [2] - Consumer spending on retail goods inched down, with spending strong among high-income earners but low and middle-income households seeking discounts due to higher prices and uncertainties [2][3] - Electrical vehicle demand was boosted by auto sales due to the end of a government tax incentive in September [3] - There was a further decline in leisure and hospitality demand from international travelers [3] Business Conditions & Employment - Manufacturing was impacted by higher tariffs and waning demand, while agriculture, energy, and transportation were generally down [4] - Improved business lending was noted due to lower interest rates, and sentiment improved in some districts, while others were weighed down by uncertainty [4] - Employment levels were stable, but labor demand was generally muted, with most districts seeing employers lower headcounts through layoffs and attrition [5] - Some employers were hiring temporary and part-time workers instead of full-time workers [5] - Labor supply was strained in hospitality, agriculture, construction, and manufacturing, potentially due to recent deportation and immigration policies [5] Inflation & Monetary Policy - Wages grew at a moderate pace, with health insurance expenses driving up labor costs [6] - Prices increased further, with input costs increasing at a faster pace and tariff input cost increases across many districts, but the pass-through of tariffs to final prices varied [6] - The Fed is trying to find the right level of reserves in the system and was ending quantitative tightening, meaning ending the runoff or the failure to replace bonds running off the Fed's balance sheet [8] - There is no talk of changing course and going back to quantitative easing, and the bar for doing QE the next time will be quite a bit higher [9]