Federal Reserve Reports Decline in U.S. Consumer Spending
"Some retailers noted a negative impact on consumer purchases from the government shutdown, and auto dealers saw declines in EV sales following the expiration of the federal tax credit," said the Beige Book.
The comprehensive economic assessment—compiled from intelligence gathered across the Federal Reserve's 12 regional reserve banks—is issued eight times annually to provide policymakers and market participants with real-time economic insights.
U.S. economic activity remained essentially flat compared to the preceding reporting period, according to observations from most of the 12 Federal Reserve Districts, the Beige Book noted.
Manufacturing output posted modest gains during the survey window, though trade tariffs and persistent uncertainty surrounding tariff policies continued to constrain sector growth, the assessment revealed.
Community-based organizations reported surging demand for food assistance programs, attributed partially to benefit payment disruptions within the Supplemental Nutrition Assistance Program stemming from the federal government shutdown, the Beige Book stated.
Price levels across the U.S. economy advanced at a moderate pace throughout the reporting window, while manufacturers and retailers faced widespread input cost pressures driven predominantly by tariff-related price increases, survey responses indicated.
"Looking ahead, contacts largely anticipate upward cost pressures to persist but plans to raise prices in the near term were mixed," the Beige Book said.
The divergence between weakening mass-market consumption and resilient high-end spending underscores growing economic stratification as different consumer segments respond unevenly to ongoing fiscal and trade policy developments.
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