The US economy has “barely changed or remained unchanged” since November, the US Federal Reserve (Fed) said this Wednesday in its Beige Book, a document that provides a detailed assessment of the economy by the country’s 12 regional central banks. .
The North American issuing institute has indicated that of these regions, all but four showed relative stagnation, of which three reported “modest” growth and one a “moderate” decline.
According to the document, consumers achieved “some seasonal relief” during the holidays, meeting expectations in most districts and exceeding them in three of them. For their part, several districts reported an increase in leisure trips. The negative part was reported by the industry, since it reduced its activity levels.
The regions continued to report that high interest rates limited car sales and real estate transactions. However, numerous contacts from various sectors cited the prospect of lower interest rates as a “source of optimism.”
In contrast, concerns about the office market, weakening global demand and the 2024 political cycle were cited as sources of economic uncertainty. Overall, most districts indicated that their companies’ expectations for future growth were positive, had improved, or both.
EMPLOYMENT
Seven districts described “little or no” change in overall employment levels, while the pace of employment growth was described as “modest to moderate” in four. Two districts continued to see a “tight” labor market, with several describing recruitment difficulties for companies seeking specialized skills.
However, almost all districts cited one or more signs of a cooling labor market, such as a greater number of candidates, lower turnover rates, more selective hiring by companies and a decrease in wage pressures. Afterwards, businesses in many districts expect wage pressures to ease and wage growth to continue to fall over the next year.
PRICES
On the price side, six districts reported “slight or modest” increases, and two reported “moderate” increases. Five districts also reported that overall price growth had slowed somewhat compared to the immediately preceding period, while another three indicated that there had been no “considerable” change in price pressure.
Companies in most regions explained that input amounts remained “stable or declining,” especially in industry and construction. There has also been increased consumer price sensitivity, forcing retailers to reduce their profit margins and, in turn, face their suppliers’ efforts to raise them.
The increase in injury and illness insurance premiums continued to affect most companies. Three districts said their companies expected price increases to be more contained over the next year, while four companies expected little change.
