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The Fed's "Beige Book" is a compilation of economic activity by each of twelve Federal Reserve districts.

The title sounds impressive but it is little more than a summation of the anecdotes from the latest Fed regional reports (Think Philly Fed, Empire State, etc.).

Let's dive into a recap.

Overall Economic Activity

  • Economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April. Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture, and transportation expressed concern about the newly imposed and/or proposed tariffs.
  • Consumer spending rose in most regions, with gains noted for nonauto retail sales and tourism, but mixed results for vehicle sales. Manufacturing activity grew moderately, and demand for nonfinancial services was mostly solid.
  • Residential construction and real estate activity expanded further, although low home inventories continued to constrain sales in several Districts. Loan demand increased, and commercial real estate activity and construction improved since the last report.
  • Transportation services activity expanded in over half of the reporting Districts, buoyed by increases in port traffic and/or air, rail and/or trucking shipments.
  • Agricultural conditions were little changed or worsened on net, in part due to persistent drought conditions.
  • Contacts in the energy sector cited a pickup in activity, except in the Richmond District, where coal production was flat and natural gas production dipped slightly.

Employment and Wages

  • Widespread employment growth continued, with most Districts characterizing growth as modest to moderate.
  • Labor markets across the country remained tight, restraining job gains in some regions.
  • Contacts continued to note difficulty finding qualified candidates across a broad array of industries and skill levels. Reports of labor shortages over the reporting period were most often cited in high-skill positions, including engineering, information technology, and health care, as well as in construction and transportation.
  • Businesses were responding to labor shortages in a variety of ways, from raising pay to enhancing training to increasing their use of overtime and/or automation, among other strategies.
  • Upward wage pressures persisted but generally did not escalate; most Districts reported wage growth as only modest.


  • Prices increased across all Districts, generally at a moderate pace.
  • There were widespread reports that steel prices rose, sometimes dramatically, due to the new tariff.
  • Prices for building materials continued to rise briskly, especially for lumber, drywall, and concrete.
  • Transportation costs also generally rose, with contacts citing higher fuel prices and shortages of truck drivers as the primary causes.
  • There were scattered reports of companies successfully passing through price increases to customers in manufacturing, information technology, transportation, and construction.
  • Businesses generally anticipate further price increases in the months ahead, particularly for steel and building materials.

Word of the Day

The word of the day is "tariff". The Beige Book had 36 instances.

To pick a representative sample, the Richmond Fed noted "Prices grew moderately, overall, but steel and aluminum prices rose sharply and were expected to rise further as a result of the tariffs."

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Wage Growth "Modest"

Despite difficulty in finding qualified employees and despite price pressures, wage growth is only modest.

Bond Market Reaction

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Inane Comment of the Day

Bloomberg Econoday wins the blue ribbon for the most absurd Beige Book comment.

"The details on tariffs are very welcome in what however is yet another subdued Beige Book, one that isn't signaling an increased pace of rate hikes for the Federal Reserve."

Only economic illiterates propose artificially rising prices is a welcome event.

These tariff-related price hikes are bad for industries that use steel, bad for consumers, and bad for the economy. They will slow economic growth.

Mike "Mish" Shedlock