📊 Summary of the Latest Beige Book – November 2025
The Beige Book is a key Federal Reserve report that provides a qualitative snapshot of current economic conditions across the 12 Federal Reserve Districts. The November 2025 edition offers a nuanced view of the U.S. economy, highlighting areas of stability, emerging risks, and sector-specific trends. Below, I break down the main findings, supported by data and direct references from the report, to help you understand the current economic landscape.
Overview of National Economic Conditions
The overall message from the latest Beige Book, Federal Reserve is that economic activity in the United States was “little changed” since the previous report. Most Districts reported either flat or slightly weaker conditions, with only one District noting modest growth and two noting modest declines. The outlook is cautious, with increased risks of slower activity in the coming months, though some optimism remains in manufacturing.
Key Themes and Trends Across Districts
- Consumer Spending and Retail Activity 🛍️
- 📉 Consumer spending declined further, especially for non-essential goods.
- 📈 Higher-end retail spending remained resilient, but auto dealers saw declines in electric vehicle (EV) sales after the expiration of a federal tax credit.
- 🏖️ Travel and tourism activity was mostly flat, with consumers showing caution in discretionary spending.
- 🛒 Some retailers reported a negative impact from the government shutdown, which disrupted consumer purchases.
- Manufacturing and Services 🏭
- ⚙️ Manufacturing activity increased somewhat in most Districts, but tariffs and tariff uncertainty were a headwind.
- 🖥️ Some manufacturers benefited from demand related to AI data centers.
- 🏢 Nonfinancial services revenues were mostly flat to down, with some Districts reporting declines.
- Real Estate and Construction 🏠
- 🏗️ Residential construction declined in some Districts, while others reported unchanged activity.
- 🏘️ Home sales activity varied, with some areas seeing declines.
- 🏬 Commercial real estate showed signs of recovery, especially in the office market.
- Agriculture and Energy 🌾
- 🚜 Agricultural conditions were stable but challenged by low prices for some crops.
- 🛢️ The energy sector was largely stable, though some contacts cited challenges from low oil prices.
- ⚡ Demand for energy, especially LNG, solar, and wind, grew moderately, driven by data center activity.
- Financial Sector 💳
- 🏦 Financial conditions strengthened marginally.
- 🏠 Consumer demand for mortgages and auto loans softened, but credit card utilization rose.
- 💼 Loan demand expanded from commercial borrowers, especially in some commercial real estate categories.
- 💵 Deposit flows were stable, and deposit rates became more competitive.
- ✅ Credit and asset quality remained high, with low delinquency rates.
- Labor Markets and Wages 👷
- 📉 Employment declined slightly, with about half of Districts noting weaker labor demand.
- 🛑 More firms limited headcounts through hiring freezes, replacement-only hiring, and attrition rather than layoffs.
- ⏳ Employers adjusted hours worked rather than employee numbers to match business volume.
- 🤖 Artificial intelligence replaced some entry-level positions or made existing workers more productive, reducing new hiring needs.
- 🔍 Employers found it easier to hire, but some skilled positions remained hard to fill, partly due to fewer immigrant workers.
- 💲 Wages grew at a modest pace, with some sectors (manufacturing, construction, health care) seeing slightly faster increases.
- Prices and Inflation 💸
- 📈 Prices increased moderately across most sectors.
- 🏭 Nonlabor cost growth remained robust, but most firms passed through only about 20% of increased input costs to customers.
- 🛒 Price pressures were particularly harmful to low- and middle-income households, especially for food and essentials.
- Community and Social Conditions 🏘️
- 🍎 Community organizations reported rising food insecurity, with increased demand for food assistance due to SNAP benefit disruptions during the government shutdown.
- 🏦 Community Development Financial Institutions (CDFIs) saw mixed activity, with some reporting increased inquiries from small businesses and others noting a decline in investment due to uncertainty.
District-Level Highlights
- Boston: Economic activity expanded sluggishly, with strong home sales offset by flat consumer spending. Labor demand weakened, but the outlook remained cautiously optimistic.
- New York: Economic activity was flat. Food insecurity rose, and food pantries struggled to meet demand.
- Philadelphia: Economic activity trended down, with employment falling and workers shifting to part-time roles. Small businesses struggled amid policy uncertainty.
- Cleveland: Business activity increased slightly, but manufacturing declined. Nonlabor costs grew robustly.
- Richmond: Modest growth continued, but manufacturing contracted. Employment and wage growth were moderate.
- Atlanta: Economic activity was little changed. Retail sales slowed, home sales declined, but commercial real estate improved.
- Chicago: Slight growth in most sectors, with prospects for farm income rising.
- St. Louis: Activity and employment were unchanged, but the outlook was pessimistic due to risks of higher prices and slower activity.
- Minneapolis: Activity was flat, with a marginal reduction in headcounts and increased price pressures.
- Kansas City: Growth slowed, labor conditions softened, but firms remained optimistic about future employment growth.
- Dallas: Activity weakened, especially in nonfinancial services and retail. The outlook worsened due to concerns about tariffs, interest rates, and uncertainty.
- San Francisco: Mixed conditions, with steady employment and modest wage and price increases. Lending activity strengthened marginally.
Risks and Outlook ⚠️
- 📉 Many contacts noted increased risks of slower activity in the coming months.
- 🏭 Some optimism remains among manufacturers, especially those benefiting from AI and data center demand.
- 🏦 Financial institutions remain stable, but Consumer Credit, Federal Reserve demand is softening.
- 🛑 The government shutdown and policy uncertainty are weighing on consumer and business confidence.
💡 Summary:
The November 2025 Beige Book, Federal Reserve paints a picture of an economy in a holding pattern, with most sectors and regions experiencing little change or slight declines. Consumer spending is soft, especially for non-essentials, and labor markets are cooling, with employers relying more on hiring freezes and reduced hours than layoffs. Price pressures persist, particularly for essentials, impacting lower- and middle-income households. Manufacturing shows some resilience, especially where AI and data centers drive demand, but uncertainty from tariffs and government policy is a drag. The financial sector remains stable, but loan demand is shifting. Overall, the outlook is cautious, with increased risks of slower growth ahead, though some sectors remain optimistic.
References:
Beige Book, Federal Reserve