Overall economic activity expanded slightly since late February, with 10 out of 12 Federal Reserve districts reporting either slight or modest economic growth, the Fed said today in its third Beige Book report of the year. Overall consumer spending barely increased, with several district reports mentioning weakness in discretionary spending. District contacts reported slight increases in nonfinancial services activity, and bank lending was roughly flat overall.
Price increases were modest, on average, running at about the same pace as in the previous Beige Book report, according to the Fed. Disruptions from geopolitical tensions in the Red Sea and the collapse of Baltimore’s Key Bridge caused some shipping delays but did not lead to widespread price increases, at least at the time of the report. One frequent comment by district contacts was that firms’ ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins.
