Prices continue to rise, and consumers make more intentional purchases. However, data center construction is helping keep the region\u2019s economy afloat, according to a report from the Federal Reserve Bank of St. Louis.<\/p>\n
The St. Louis Fed publishes reports<\/a> through its Beige Book<\/a> eight times a year, using anecdotal information gathered from key contacts within the Fed\u2019s eighth district. The district includes the eastern half of Missouri, southern Illinois, all of Arkansas and parts of Indiana, Kentucky, Mississippi and Tennessee.<\/p>\n The top line of the report focuses on prices rising at a \u201crobust pace\u201d since the book\u2019s previous report last month.<\/p>\n Costs go up for electricity, food, fuel<\/p>\n Charles Gascon, economist and assistant vice president at the Federal Reserve Bank of St. Louis, said the Fed has received numerous reports of price increases, especially from electricity providers.<\/p>\n \u201cAn electricity provider noted that they’re having supply chain shortages, and that’s leading to some cost increases for energy infrastructure materials \u2014 metal prices being one, copper prices being another,\u201d he said.<\/p>\n But at the same time, meat and poultry prices remain high along with other general food costs. Gason said grocery stores have reported raising prices, and some consumers say they\u2019re trading down to store-brand products and avoiding luxuries.<\/p>\n \u201cPeople are sticking to their lists \u2014 less discretionary purchases,\u201d Gascon said. \u201cYou’re picking up what you need, and not necessarily some of those extra items that you would have gotten otherwise.”<\/p>\n According to the report, a nonprofit organization in St. Louis told the Fed meal demand rose about 30% over the past two months. That\u2019s due to declining consumer purchasing power and reduction in SNAP benefits, the report stated.<\/p>\n Gascon said high fuel prices are playing a part in more targeted purchasing from consumers, who have less money to spend after paying at the pump.<\/p>\n He noted that banks have taken note of lower-income households struggling in some cases.<\/p>\n \u201cThey’re not seeing widespread distress like delinquencies,\u201d he said. \u201cBut they are seeing lower cash balances, more overdrafts and things like that, which does suggest that in some cases there’s cash flow issues for lower-income households.\u201d<\/p>\n Data centers boosted economy<\/p>\n Despite that, the region\u2019s economy did grow slightly since last month\u2019s report. Gascon said that\u2019s largely due to data center developments throughout the region that are keeping purchasing of raw materials high.<\/p>\n \u201cManufacturing and production side of the economy and data center construction, AI build-out \u2014 that’s really where there’s a lot of strength in economic activity,\u201d Gascon said.<\/p>\n Developers have pitched around a dozen data center projects in the St. Louis area alone in the past year. They include a 120-megawatt data center in Midtown St. Louis expected to be completed by the end 2028 and a hyperscale data center planned for the Festus area.<\/p>\n The projects have met with pushback from the public, including the ousting of half of the Festus City Council over approving ClayCo CRG\u2019s data center project.<\/p>\n A 2025 report from the Federal Reserve warned while data centers may temporarily helped the economy, the boost may be a temporary boon.\u00a0<\/a><\/p>\n Housing market and World Cup disappoint<\/p>\n Gascon said there has been some “weakness” in residential housing construction lately.<\/p>\n The report saw some upsides in real estate sales, though. One St. Louis’ agency described the housing market as \u201cvery active\u201d with buyers making cash offers and waiving inspections.<\/p>\n