Investing.com — The twelve Federal Reserve Districts reported a slight to moderate increase in economic activity in late November and December, according to the Beige Book published in January 2025. Consumer spending saw a moderate increase, with strong holiday sales reported in most Districts. Vehicle sales also saw a modest rise.
However, construction activity saw a decrease due to high costs for materials and financing. Manufacturing activity also decreased slightly as manufacturers built up inventories in anticipation of higher tariffs. The residential real estate activity remained unchanged due to high mortgage rates, while commercial real estate sales saw a slight increase.
Nonfinancial services sector saw slight growth, with an emphasis on growth in leisure, hospitality, and air travel. However, truck freight volumes were reported to be down. Financial service providers reported modest growth in lending and slight changes in asset quality, but concerns were raised about delinquencies among small businesses and lower-income households.
The agricultural sector continued to struggle, with lower farm incomes and weather-related issues. The spread of avian flu also impacted egg supplies, leading to increased prices. Energy activity was mixed, with more contacts being optimistic about the outlook for 2025 than pessimistic. However, concerns were raised about changes in immigration and tariff policy potentially negatively affecting the economy.
Employment saw a slight increase overall, with job growth in several service industries, notably healthcare. Wage growth picked up to a moderate pace in most Districts. Prices increased modestly overall, with growth rates ranging from flat to moderate. Selling prices and input costs also rose, with contacts highlighting higher insurance prices, particularly for health insurance.
The report was prepared at the Federal Reserve Bank of Chicago based on information collected on or before January 6, 2025. The document summarizes comments received from contacts outside the Federal Reserve System and does not provide commentary on the views of Federal Reserve officials.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
