Beige Book: National Summary
September 3, 2025
Note: This report was prepared at the Federal Reserve Bank of Philadelphia based on information collected on or before August 25, 2025. This document summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.
Overall Economic Activity
Most of the twelve Federal Reserve Districts reported little or no change in economic activity since the prior Beige Book period—the four Districts that differed reported modest growth. Across Districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices. Contacts frequently cited economic uncertainty and tariffs as negative factors. New York reported that "consumers were being squeezed by rising costs of insurance, utilities, and other expenses." Contacts observed the following responses to the consumer pullback. Retail and hospitality sectors offered deals and promotions to help price-sensitive consumers stretch their dollars—supporting steady demand from domestic leisure tourists but not offsetting falling demand from international visitors. The auto sector noted flat to slightly higher sales, while consumer demand increased for parts and services to repair older vehicles. Manufacturing firms reported shifting to local supply chains where feasible and often using automation to cut costs. The push to deploy AI partly explains the surge of data center construction—a rare strength in commercial real estate noted by the Philadelphia, Cleveland, and Chicago Districts. Atlanta and Kansas City reported that data centers had increased energy demand in their Districts. Overall, sentiment was mixed among the Districts. Most firms either reported little to no change in optimism or expressed differing expectations about the direction of change from their contacts.
Labor Markets
Eleven Districts described little or no net change in overall employment levels, while one District described a modest decline. Seven Districts noted that firms were hesitant to hire workers because of weaker demand or uncertainty. Moreover, contacts in two Districts reported an increase in layoffs, while contacts in multiple Districts reported reducing headcounts through attrition—encouraged, at times, by return-to-office policies and facilitated, at times, by greater automation, including new AI tools. In turn, most Districts mentioned an increase in the number of people looking for jobs. However, half of the Districts noted that contacts reported a reduction in the availability of immigrant labor, with New York, Richmond, St. Louis, and San Francisco highlighting its impact on the construction industry. Half of the Districts described modest growth in wages, while most of the others reported moderate growth. Two Districts noted little or no change in wages.
Prices
Ten Districts characterized price growth as moderate or modest. The other two Districts described strong input price growth that outpaced moderate or modest selling price growth. Nearly all Districts noted tariff-related price increases, with contacts from many Districts reporting that tariffs were especially impactful on the prices of inputs. Contacts in multiple Districts also reported rising prices for insurance, utilities, and technology services. While some firms reported passing through their entire cost increases to customers, some firms in nearly all Districts described at least some hesitancy in raising prices, citing customer price sensitivity, lack of pricing power, and fear of losing business. In some cases, as highlighted by Cleveland and Minneapolis, firms reported being under pressure to lower prices because of competition, despite facing increased input costs. Most Districts reported that their firms were expecting price increases to continue in the months ahead, with three of those Districts noting that the pace of price increases was expected to rise further.
Highlights by Federal Reserve District
Boston
Economic activity expanded slightly overall, but consumer spending was flat. Employment was down slightly, while wages and prices increased modestly. Home sales increased moderately from a year earlier. The outlook remained cautiously optimistic on balance, although tariff-related uncertainty dimmed the outlook for consumer spending.
New York
Economic activity declined slightly as tariff-related uncertainty continued to weigh on businesses. Employment in the region was mostly unchanged, and wage growth remained modest. Selling prices rose at a moderate pace, marking some acceleration since the previous reporting period, and input prices rose strongly.
Philadelphia
Business activity increased modestly in the current Beige Book period. Employment levels held steady, and wages rose at modest pre-pandemic rates. Firm prices rose moderately, straining budgets for many households and small businesses, and inflation expectations are higher still. In addition, tariffs and federal budget cuts are expected to add additional stress. Still, expectations for future growth broadened among most firms.
Cleveland
Fourth District business activity increased slightly in recent weeks, and contacts expected activity to rise modestly in the months ahead. Manufacturers reported flat demand because of uncertainty, and retailers said sales were flat because of affordability concerns. Contacts said cost growth remained robust, while their selling prices increased modestly.
Richmond
The regional economy grew modestly in recent weeks. Consumer spending drove the overall growth as activity in non-consumer facing sectors of the economy were flat to down slightly. In particular, manufacturing activity was down modestly this cycle. Employment levels were largely unchanged, and wage growth remained moderate. Price growth remained moderate, overall, despite some pickup in price growth in the services sector.
Atlanta
The Sixth District economy declined slightly. Employment remained steady, and wage pressures moderated. Prices rose moderately. Consumer spending slowed, leisure travel fell, and business travel was flat. Home sales rose slightly; commercial real estate weakened. Transportation and manufacturing declined modestly. Lending at District banks increased. Energy activity rose.
Chicago
Economic activity in the Seventh District increased modestly. Consumer spending increased moderately; manufacturing activity increased modestly; employment and business spending increased slightly; nonbusiness contacts saw no change in activity; and construction and real estate activity declined slightly. Prices rose moderately, wages rose modestly, and financial conditions loosened slightly. Prospects for 2025 farm income were unchanged.
St. Louis
Economic activity and employment levels have remained unchanged while wages and prices have increased at a faster pace in the recent past. Contacts continue to express a high degree of uncertainty and concern about the impact of immigration policies on labor supply; they expect prices to accelerate over the next year due to tariffs. The outlook remains slightly pessimistic, but deterioration has subsided.
Minneapolis
District economic activity contracted slightly. Employment fell as labor demand softened. Wage pressures were moderate, and prices ticked up modestly. Consumer spending fell as price sensitivity rose. Manufacturing also fell, with wide variation among contacts. Commercial and residential construction improved slightly, and home sales rose slightly. Agricultural conditions remained weak given poor commodity prices and despite good crop conditions.
Kansas City
Economic activity was generally flat across the District. Employment declined modestly, and wage pressures remained subdued, although growth in non-wage benefit expenses caused total labor costs to rise. Input price growth was broad-based and contributed to moderate growth in selling prices, declines in profit margins, and expectations of sustained price pressures.
Dallas
Economic activity in the Eleventh District economy rose modestly, buoyed by a pickup in nonfinancial services and manufacturing activity. Loan demand grew, but the housing market remained weak. Employment was flat and staffing firms noted slow hiring activity. Price pressures persisted, particularly in the manufacturing sector. Outlooks improved but there was widespread trepidation regarding shifting trade policy, high interest rates, and more restrictive immigration policy.
San Francisco
Economic activity edged down slightly. Employment levels were down slightly. Wages grew somewhat, and prices rose modestly. Conditions in agriculture, retail trade, and consumer and business services sectors eased slightly. Manufacturing activity declined modestly. Conditions in residential and commercial real estate were largely unchanged, and lending activity was stable.