Fed Beige Book Shows US Economy Gaining Momentum, Jobs Stable

The latest Beige Book released by the Federal Reserve highlights a gradual pickup in economic activity across most regions of the United States since mid-November. According to the survey of regional contacts, the pace of growth ranged from “slight to modest,” marking an improvement compared to the previous three reporting periods that largely showed little change.


The period covered in the report closely followed the end of the longest government shutdown in US history, a factor that had temporarily slowed activity in several districts. Employment levels remained mostly unchanged in eight of the Fed’s twelve regional districts, while wages grew at a moderate pace. Many businesses noted that wage growth had returned to more “normal” levels.


Price pressures remained moderate overall, though several businesses that had initially absorbed tariff-related costs began passing them on to customers as pre-tariff inventories dwindled and profit margins came under pressure. These trends reflect a labor market that has broadly cooled but continues to provide stable footing for economic growth.
Interest-rate watchers have remained cautious.

After three quarter-percentage-point cuts in late 2025, markets currently anticipate that the Fed may hold rates steady until mid-year. Policymakers continue to monitor inflation, which remains above the Fed’s 2% target, alongside ongoing uncertainties stemming from trade policies.


What It Means

Overall, the Fed’s Beige Book indicates that the US economy is gaining momentum while the labor market remains stable. Wages are rising at a healthy pace, and price growth is moderate. Businesses are navigating the combined effects of tariffs, supply constraints, and evolving technology adoption, particularly in AI-driven productivity tools.

While inflation and policy uncertainties remain, the report suggests a steady, if cautious, path forward for growth.
Policymakers will reconvene on January 27-28 to assess the next steps for interest rates, with the Beige Book serving as a key reference point for decision-making.