Slight to modest growth in 8 of 12 districtsTwo districts with little changeTwo districts with modest declines<\/p>\n
The April Beige Book landed with a thud. Eight of twelve districts managed slight-to-modest growth, but two were flat and two \u2014 Boston and New York \u2014 actually contracted. That’s not a recession signal, but it’s not exactly confidence-inspiring either.<\/p>\n
The elephant in the room is the Middle East conflict, which gets mentioned on practically every page of the report. It’s driving energy costs sharply higher across all twelve districts, pushing up freight, plastics, fertilizers, and basically anything that touches a barrel of oil. The Strait of Hormuz closure is now feeding directly into fertilizer supply disruptions, and Cleveland contacts described fuel costs as “skyrocketing.” This is a supply shock playing out in real time.<\/p>\n
The labor market is frozen, not broken. Employment is essentially flat nationwide \u2014 low hiring, low firing, low turnover. The same thing we’ve been hearing from most Fed officials. Companies are stuck in wait-and-see mode. The big tell here is the surge in demand for temp workers across multiple districts, that’s generally good but it could be bad because they’re waiting for AI disruption.<\/p>\n
Margins are getting crushed. This is the key story for anyone trading equities. Input costs are running well ahead of selling prices almost everywhere. Firms can’t pass through the full hit from energy, metals, and tariffs to consumers who are already stretched. Philadelphia reported a homebuilder eating construction cost increases because sale prices are locked in before building starts. <\/p>\n
The consumer is hanging in there \u2014 barely. Spending is up slightly on aggregate, but the bifurcation is stark. Luxury is fine. Everything else? Food bank demand is surging. Multiple districts flagged rising credit card usage, debt consolidation, and overdrafts. A New York restaurateur noted working-class consumers are being squeezed by car costs, insurance, and food. One Kansas City contact put it bluntly: LMI households “can’t out-budget low wages, tariffs, and inflation.”<\/p>\n
Housing is stuck. Today’s NAHB housing market index was bad and mortgage rates are back above 6.5%. Inventories are starting to build in some markets but remain tight in others. The million-dollar-plus segment is doing fine because of course it is.<\/p>\n
The commercial real estate bright spot is data centers. Basically every district mentioned them. AI-related leasing is surging in New York, though with shorter lease terms \u2014 which tells you these companies aren’t sure how big they’ll actually get. Meanwhile, Class A office is strong, everything below that remains challenged.<\/p>\n
Overall, it’s not a great economy aside from a few pockets, though the end of the war should help.<\/p>\n","protected":false},"excerpt":{"rendered":"Slight to modest growth in 8 of 12 districtsTwo districts with little changeTwo districts with modest declines The…\n","protected":false},"author":2,"featured_media":409870,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-606969","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/606969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=606969"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/606969\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/409870"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=606969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=606969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=606969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}