Wages Slow as Fed’s Beige Book Signals Tepid Economic Momentum

The latest Beige Book from the Federal Reserve paints a picture of an economy moving with caution, as wage growth continues at only a modest pace across most regions. The report—released eight times a year to summarize real-time economic conditions—indicates that slow wage gains have contributed to further moderation in consumer spending, particularly among middle- and lower-income households. Higher-end shoppers, however, remain more resilient, helping offset softer demand in other segments.

According to the Fed’s district surveys, overall economic activity showed little change compared with the previous assessment. Most districts reported stable conditions, though two regions noted slight declines and one registered modest growth. Several business contacts expressed concern about the risk of slower activity in the coming months, especially in manufacturing and construction, where signs of cooling orders and project delays have begun to emerge. Even so, some manufacturers voiced cautious optimism, pointing to improving supply chains and expectations of steadier demand early next year.

Price pressures continued to rise at a moderate pace, suggesting that inflation is easing but remains persistent enough to keep policymakers attentive. Businesses across multiple sectors reported that while cost increases have softened, they are still adjusting pricing strategies to protect margins.

Currency markets reflected the day’s cautious sentiment. The US Dollar showed mixed performance against major currencies, weakening notably against the New Zealand Dollar and the Australian Dollar, while showing relative strength against the Japanese Yen. The day’s heat map highlighted shifting market positioning ahead of key US economic data and expectations surrounding future Federal Reserve policy moves.

Overall, the Beige Book’s latest reading underscores a US economy that is neither stalling nor accelerating meaningfully. Wage growth remains subdued, consumer spending is uneven, and businesses continue to navigate a landscape marked by uncertainty but pockets of confidence. As investors and policymakers digest the findings, attention will likely turn to upcoming employment and inflation data for clearer signals on the Fed’s next steps.