The Federal Reserve reported that 11 of its 12 regional districts experienced economic activity growth at a 'slight to moderate' pace during late May through June, with one district showing no change, according to the July Beige Book released on the 15th. The assessment, based on information collected before July 6, represents the second such report issued under Chair Kevin Warsh and arrives two weeks before the Federal Open Market Committee meeting scheduled for the 28th. The overall expansion pace was described as 'quite similar' to the prior period, maintaining consistency with May's Beige Book findings when 10 districts showed 'slight to moderate' growth, one experienced a 'slight' decline, and one had no change.
Fed Downgrades Price Assessment to Moderate Growth
The July Beige Book reported that prices rose 'moderately' overall, with nine districts reporting moderate increases, two districts showing robust gains, and one district experiencing slight increases. This represents a downgrade from the May Beige Book, which characterized price growth as rising at a 'moderate to strong' pace. The stronger modifier 'strong' was removed from the July assessment. The report stated that 'compared to the prior reporting period, the pace of price increases was the same or slower across all regions.' Price increase expectations 'varied by region,' with contacts in some districts expecting inflation to continue at the current pace, while others anticipated slowing inflation partly due to declining fuel prices.
![Federal Reserve Eccles Building in Washington D.C.]()
Federal Reserve Eccles Building in Washington D.C. Photo: Federal Reserve
Employment Gains Improve Across Five Districts
Employment increased overall, with five districts showing modest, moderate, or solid gains, while seven districts experienced little to no change. This marks an improvement from the May Beige Book, which reported that 11 districts had little to no change and one district experienced modest increases. Employment grew across various industries including manufacturing, construction, and retail. Wage growth remained at 'modest to moderate' levels in most districts, though two districts reported only slight wage increases.
Contacts Expect Continued Expansion Amid Fuel Cost Uncertainty
Contacts generally expected the economy to continue expanding over the coming months, though several districts noted heightened uncertainty in fuel cost outlooks. The Beige Book is an economic trends report compiled by the 12 regional Federal Reserve Banks through contact with banks, businesses, and experts in their respective jurisdictions. It is typically released two weeks before Federal Open Market Committee meetings. The next FOMC meeting is scheduled for the 28th.
FAQ
What did the Federal Reserve report about economic activity in the July Beige Book?
The Federal Reserve reported that 11 of its 12 regional districts experienced economic activity growth at a 'slight to moderate' pace during late May through June, with one district showing no change. The overall expansion pace was described as 'quite similar' to the prior period.
How did the Fed's price assessment change in the July Beige Book?
The July Beige Book reported prices rose 'moderately' overall, a downgrade from the May Beige Book which characterized price growth as rising at a 'moderate to strong' pace. Nine districts reported moderate price increases, two showed robust gains, and one experienced slight increases, with the pace of increases the same or slower across all regions compared to the prior period.
What improvements occurred in the labor market according to the July Beige Book?
Employment increased overall, with five districts showing modest, moderate, or solid gains while seven districts experienced little to no change. This represents an improvement from May when 11 districts had little to no change and only one district experienced modest increases. Employment grew across manufacturing, construction, and retail industries.
