Fed Brownbook: respondents generally expect economic activity to remain stable or improve

The Fed Beige Book noted that economic activity increased slightly in three regions, while the number of regions reporting flat or declining economic activity increased to nine in the current period from five in the previous quarter. Employment levels were generally stable, although there were isolated reports of companies filling only essential positions, reducing hours and shifts, or lowering overall employment levels through attrition. Reports of layoffs, however, remained rare. Overall, wage growth was moderate, while increases in non-labour input costs and sales prices ranged from slight to moderate. Consumer spending declined in most areas, after remaining generally stable during the previous reporting period. In addition, respondents generally expected economic activity to remain stable or improve, and the Federal Reserve Beige Book noted that auto sales continued to vary by region, with sales increasing in some areas and slowing in others in response to rising interest rates and high auto prices. Manufacturing activity declined in most regions, with two regions noting that these declines were part of an ongoing contraction in the sector. Residential construction and real estate activity was mixed, although most districts reported weaker home sales. Similarly, reports of commercial construction and real estate activity were mixed. Regional respondents generally expect economic activity to remain stable or improve over the next few months, but respondents in three regions anticipate a slight decline.