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Residential construction declines as Fed Beige Book shows mixed consumer signals
The Fed reported consumer spending grew slightly overall, while residential construction fell and nonresidential construction rose on balance, including some data center driven activity.
Economic activity increased modestly since early July across most Federal Reserve districts, according to the Fed’s latest Beige Book data, with manufacturing, tourism, and services all reporting growth. The Fed said consumer spending grew slightly on balance but remained price sensitive in parts of the economy. Residential construction declined, while nonresidential construction increased on balance, with some districts pointing to a high concentration of activity tied to data center projects.
On the labor side, the Beige Book found employment rose slightly and wages grew moderately, while prices increased. The report also highlighted improved or stable financial conditions as loan volumes stayed solid or increased in most districts.
Looking ahead, the overall outlook was positive but uncertain, with contacts citing heightened uncertainty tied to higher energy prices, policy and international conflict. The Beige Book also noted auto sales were mostly subdued, influenced by weaker consumer confidence, high fuel prices, and rising financing costs.