The economy showed little growth in recent weeks, according to the Federal Reserve’s latest Beige Book..Agricultural conditions remained weak in the Minneapolis region. Although good weather helped boost crop prospects, low prices left farmers at or below break-even, according to the report. Fertilizer costs, driven higher by tariff concerns, added pressure. Oil and gas production ticked up slightly, while exploration activity was steady.Ag income projections were unchanged in the Chicago region as record crop yields pressured prices. Livestock earnings offered relief. Though cattle prices hit historic highs, fertilizer costs tied to tariffs raised concerns about future farm expenses. Ag conditions remained challenging in the St. Louis region, with crop prices below break-even levels and rising farm equipment defaults, according to the Beige Book. Livestock producers saw strong profits but were hesitant to expand given costs and uncertainty.Ag conditions weakened in the Kansas City region as low crop prices offset strong production prospects, according to the report. Corn prices fell on expectations of record U.S. yields, while elevated input costs continued to pressure farmers. Rising cattle prices provided relief for livestock producers.Economic activity fell in recent weeks in the Minneapolis region as employers cut back on hiring, consumers spent less, and manufacturers reported weaker demand, according to the report. Activity was flat across the Kansas City region, with drops in employment, limited wage growth and increasing cost pressures squeezing businesses Economic activity increased modestly in the Chicago district in recent weeks, with consumer spending, manufacturing, and business investment increasing, according to the Beige Book. Regional contacts expect only slight growth over the next year. Economic activity was steady in the St. Louis region, but businesses reported rising costs, labor shortages tied to immigration policies and growing, tariff-fueled uncertainty.Consumer spending weakened across the country as rising costs for insurance, utilities and other essentials outpaced wage gains. Consumer spending softened in the Minneapolis region, with retailers and restaurants citing slower traffic and heightened price sensitivity. Consumer spending increased moderately in the Chicago region, led by higher demand for jewelry, landscaping, computers, and hospitality services, according to the Beige Book. Retailers and hospitality firms leaned on discounts to attract price-sensitive shoppers, while auto dealers reported flat to slightly higher sales, with stronger demand for parts and repair services.Labor markets were steady, though several districts reported layoffs, hiring hesitancy, or workforce reductions through attrition. At the same time, many firms faced tighter availability of immigrant labor, particularly in construction. Wage growth was described as modest to moderate across most regions.Employment edged lower in the Minneapolis region as more firms reported shrinking headcounts, according to the Beige Book. While layoffs remained limited, many employers chose not to fill open positions due to uncertainty. Labor markets improved in the Chicago region. While some firms continued to struggle hiring skilled workers, others saw weaker demand, slower hiring and reduced attrition. Rising fears of immigration enforcement were cited as affecting worker attendance in nursing and hospitality. Wages and benefits grew modestly.Declines in services and manufacturing employment sparked a modest drop in overall employment in the Kansas City region. However, labor costs were expected to keep climbing as non-wage benefits such as health insurance outpaced wages.Employment levels were unchanged in the St. Louis region as firms paused hiring, citing unclear federal policies and weaker demand. Still, labor shortages persisted in manufacturing, construction and agriculture, with businesses reporting higher turnover and wage growth running faster than earlier this year. Some employers noted double-digit wage increases to attract and retain workers, particularly in agriculture and hospitality.Manufacturers nationwide increasingly turned to local supply chains and automation to cut costs. A rare bright spot emerged in data center construction, which surged in several Districts, boosting energy demand in Kansas City. Manufacturing contracted slightly in the Minneapolis region as more firms reported lower orders than gains. Price growth remained moderate in most Districts, though tariff-related cost increases weighed heavily on input prices. Firms reported higher costs for insurance, utilities and technology services, with some reluctant to pass the increases on to customers due to competition and price sensitivity. Most contacts expect prices to keep rising in the months ahead.Price pressures increased modestly in the Minneapolis region, with about a quarter of firms raising prices in July, according to the Beige Book. A similar share are planning increases. Input costs rose for roughly half of businesses, with retailers and manufacturers warning of squeezed margins. Retail fuel prices fell slightly, offering some relief.Prices increased at a moderate pace in the Chicago region, with tariffs pushing up costs for raw materials such as steel, aluminum and chemicals. Some manufacturers passed along these higher costs, while others did not due to consumer sensitivity. Retailers noted longer promotional periods and reported being willing to delay passing tariff-driven price increases to shoppers until next year.
