8 of 12 districts reported “slight to modest” growth, 3 were flat, and only 1 saw a modest decline. That’s technically an improvement from recent cycles where “little change” dominated. But the details tell a more conditional story.

Where The Growth Is Coming From

Most of the momentum came from holiday related consumer spending, and even that was uneven..

• Spending was strongest among higher income households, especially on luxury goods, travel, and experiences.

• Low and moderate income consumers were increasingly price sensitive, hesitating on nonessential purchases.

• Auto sales were flat to down across most districts.

• Manufacturing was split: 5 districts expanding, 6 contracting.

That’s not broad based strength. It’s a narrow pocket of resilience.

Labor Is Stable, but Defensive

Employment was described as “mostly unchanged”..

• 8 of 12 districts reported no net hiring growth.

• When firms hired, it was mostly to backfill, not expand.

• Multiple districts reported increased use of temporary workers “to stay flexible in uncertain times.”

• Wage growth was moderate and back to pre pandemic norms, not accelerating.

One concrete data point cuts through the language: in Minneapolis, job postings fell 18% year over year. That’s not collapse..but it’s cooling.

Prices and Tariffs And The Margin Squeeze

Prices were said to be rising at a moderate pace, but tariffs were a consistent pressure across districts..

• Firms that had been absorbing tariff costs are now passing them through as pre tariff inventories run out.

• At the same time, retailers and restaurants are reluctant to raise prices because customers are price sensitive.

• Energy and insurance costs were repeatedly cited as margin stressors.

This is the key tension..costs are rising faster than many businesses can pass them on.

Examples from districts..

• Boston reported credit card processing fees up to 4%, with some merchants eating the cost.

• St. Louis and Cleveland noted restaurants unable to pass costs along, leading to financial strain.

• Dallas data showed manufacturing input costs averaged 5.5% in 2025, while selling prices rose only 2.3%.

That gap is where slowdowns usually start.

Consumers: K Shaped and Cautious

Across districts, the same pattern showed up..
• Higher income consumers kept spending.

• Middle and lower income households were trading down, comparing prices, and cutting discretionary spending.

• In Cleveland, nearly 70% of low income workers said expenses rose, about half said income didn’t cover costs, and 45% planned to look for new jobs.

That’s pressure, not confidence.

My View

The Beige Book isn’t describing a confident expansion. It’s an economy that’s still moving, but on thinner margins and narrower demand.

The risk here isn’t a sudden break. It’s a grind..

• rising input costs,
• delayed price pass through,
• margin compression,
• cautious hiring,
• and increasingly selective consumers.

That’s how growth slows quietly without a headline moment and the Beige Book, despite its calm tone, is already sketching that outline.