The latest Federal Reserve Beige Book, released on Wednesday, shows that the U.S. economy remained largely unchanged even as consumer spending continued to ease and hiring activity weakened. The report, compiled by the San Francisco Fed using data collected through Nov. 17, indicates that overall economic conditions were stable but under pressure.
According to the survey, consumer spending softened further compared to the previous period. While most retail categories experienced slower demand, higher-end retail spending stayed resilient and helped offset some of the broader decline.
Employment trends also showed slight deterioration. Roughly half of the Fed’s regional districts reported weaker labor demand, though this shift has not yet translated into widespread layoffs. Many companies are choosing hiring freezes, replacement-only hiring, or natural attrition rather than cutting existing staff.
Early signs of artificial intelligence affecting the labor market also appeared in the report. Several firms noted that AI tools had started replacing some entry-level roles or had improved worker productivity enough to reduce the need for new hires.
On the inflation front, price increases continued at a moderate pace. Rising input costs were a key driver, and most business contacts expect upward cost pressures to persist over the coming months.
The Beige Book was released as expectations grow for another Federal Reserve rate cut next month. About 80% of traders anticipate the Fed will lower interest rates again at its Dec. 9–10 meeting, according to the Fed Rate Monitor Tool.
