Fed Beige Book: Most regions saw slight or modest growth

Labor markets

Employment increased slightly overall. Eight districts reported modest employment gains, while four reported no change. Labor availability improved, although shortages persisted in some sectors. Employee turnover has decreased as employers have gained bargaining power. Hiring plans were mixed; Some districts expected continued modest job gains, while others anticipated reduced hiring due to weaker business demand and economic uncertainty. Wage growth has been moderate, with some districts noting normalization to pre-pandemic levels.

Prices

Prices have increased slightly. Many districts reported consumer resistance to price increases, leading to shrinking profit margins as input costs increased. Retailers offered discounts to attract customers. Input costs, particularly insurance, continued to rise, even as the costs of some construction materials declined. The costs of manufacturing raw materials have also decreased. Slight price growth is expected to persist in the short term.

Market Forecast

Given the mixed signals across sectors and the constraints imposed by high interest rates and tight credit, the market outlook is pessimistic. Increased uncertainty and potential downside risks further support this cautious stance. Traders should prepare for potential volatility and consider short-term risk mitigation strategies.

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